Dogecoin’s price action has remained muted following Canadian crypto company Neptune Digital Assets’ announcement that it had purchased 1 million DOGE in December.
Despite the news, the market reaction has been lackluster, with DOGE recording only a slight 1% uptick in the past 24 hours.
Dogecoin Struggles to Gain Traction
In an update shared on Tuesday, publicly traded Canadian crypto company Neptune Digital Assets announced that it acquired 1,000,000 DOGE on December 27. The digital assets firm confirmed that the purchase was made through a strategic derivative trade at an average price of $0.37 per token.
However, the announcement has failed to drive significant momentum in the market. DOGE trades at $0.26 at press time, noting a slight 1% rally over the past 24 hours. During the same period, trading volumes remain low, indicating that the price rally is driven by short-term speculative trades rather than strong buying pressure.
DOGE’s trading volume has totaled $3.37 billion over the past 24 hours, dropping 50% during that period.
When an asset’s price rises while trading volume declines, it suggests weak buying pressure. Fewer participants drive the price up, indicating a lack of strong demand for the meme coin, which is making the rally unsustainable and increasing the risk of a reversal.
Further, DOGE’s Chaikin Money Flow (CMF) reflects the poor demand for the leading meme coin among market participants. As of this writing, it is below the zero line at -0.06.
The CMF indicator measures the strength of buying and selling pressure by analyzing price and volume over a specific period. When its value is below zero, selling pressure outweighs buying pressure, suggesting a bearish trend and potential further downside for the asset.
DOGE Price Prediction: Bearish Pressure Persists as Downtrend Holds
Since January 18, DOGE has traded below a descending trend line, and its value has fallen by 33%. This pattern is formed when an asset’s price consistently makes lower highs over time, connecting these points to create a downward-sloping resistance line.
When an asset trades below this trend line, sellers remain in control, and the overall market sentiment is bearish. Breaking above the trend line would signal a potential trend reversal, but staying below it suggests continued downward pressure.
If demand weakens further and the downward pressure on DOGE strengthens, its price could drop to $0.24. Should the bulls fail to defend this level, the coin’s price could fall further to $0.19.
On the other hand, a resurgence in DOGE’s demand will invalidate this bearish outlook. In that scenario, the coin’s price could climb toward $0.32.
Disclaimer
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