Dogecoin Price Forecast: DOGE Paralyzed Despite Elon Musk's Upgrade Tweets 

Last Updated July 23rd 2021
2 Min Read
  • Dogecoin price back to trading below $0.2 as the 'gravitational pull' deepens.
    • Low network activity is a significantly bearish signal for DOGE in the near term.

    Dogecoin was almost pushed to the drawing board at $0.16 after losing support at $0.2. A recent uptick brought the meme coin close to $0.23, but a correction ensued. As discussed on Tuesday, a daily close under $0.2 would introduce a massive bearish perspective.

    Why Dogecoin price recovery is a losing battle

    Dogecoin rose to stardom at the beginning of the year, riding on undying support from Elon Musk, a renowned billionaire. The meme coin rocked to become a top-five crypto asset and hit an all-time high of $0.75. Investors who dared to hop onto the ship headed for the high tide seas saw their fortunes bloom.

    For several weeks, tweet mentions related to Dogecoin surmounted Bitcoin's. At the same time, Musk, the founder of Tesla, added fuel to DOGE's rocket. Still, as the crypto market flipped bearish in April, Dogecoin was never able to come up for air.

    Most investors are deeply in losses, asking for help from Musk. Nonetheless, recent tweets from him regarding an upgrade that would make Dogecoin the most used cryptocurrency in the world failed to impact the price. Analysts say that the days when Musk sent Dogecoin to the 'moon' may be long gone.

    At the time of writing, DOGE trades at $0.192 as bulls fight to recover the ground above $0.2. Its immediate downside has been protected at $0.185. If the upswing above $0.2 becomes a challenge, Dogecoin will stretch the bearish leg to $0.16, June's support.

    Note that most technical indicators and chart patterns hint at the downtrend gaining traction. For instance, the Moving Average Convergence Divergence (MACD) has a bearish signal, compelling traders to keep offloading their bags. A death cross pattern adds credence to the pessimistic outlook on the four-hour chart.

    DOGE/USD four-hour chart

     DOGE/USD 4-hour chart 071421

    According to IntoTheBlock on-chain data, Dogecoin is experiencing a continuous dip in network activity. The "Daily Active Addresses" model shows the number of addresses actively transacting on the protocol each day.

    As illustrated on the chart below, these addresses stand at nearly 47,000, down from a 30-day high of 125,000. It is worth noting that declining network activity is a bearish signal because it negatively impacts the level of user interaction.

    Dogecoin network activity in the red

     DOGE/USD into the block chart 071421

    Similarly, speculation for gains to higher levels goes down, leaving Dogecoin in bearish hands. Therefore, if on-chain fundamentals fail to occur, the downtrend will carry on in the near term and perhaps pull Dogecoin to $0.1.