Dogecoin (DOGE) is making a steady resurgence after falling to November 2022 lows. Will the negative social sentiment convince crypto investors to buy the dip?
A closer look at the on-chain data suggests that the meme coin may have found a bottom.
Dogecoin (DOGE) Social Sentiment Hits Local Low
On March 10, Dogecoin fell to $0.065, in a bearish move that sent it towards the levels recorded during the Nov. 2022 crypto crash. However, by March 22, it had recovered 17%, reaching $0.077. The social sentiment among Dogecoin network participants appears to have taken a downturn in recent weeks. According to blockchain analytics firm, Santiment, the mentions of Dogecoin across popular crypto media channels have dwindled significantly in the last 30 days,
The chart below depicts how Dogecoin’s social dominance declined from 6.8% on Feb. 19 to 2.6% on March 22.
Social dominance expresses the share of Dogecoin mentions as a percentage of aggregate social media discussions involving a select group of over 50 top-ranking crypto projects.
Typically, a decline in social dominance indicates that most network participants and holders are currently pessimistic, which could spur crypto investors to swoop in to buy the dip.
Another significant bullish signal for DOGE is the positive divergence between daily active addresses and recent price action.
The chart below shows that between Feb 22 and March 21, the DOGE price declined nearly 10%, but the number of daily active addresses has increased from 49,997 to 56,300 while making a series of higher highs.
Typically, if a blockchain network begins attracting traction while the price of the underlying coins is in a downtrend, it signals an imminent recovery. Consequently, the positive divergence could propel DOGE into more gains in the coming weeks.
Dogecoin Price at $0.10 Next?
According to the Exchange Market Depth chart from IntoTheBlock, DOGE could soon break above $0.10. The Market Depth chart depicts key buy walls and significant sell zones based on the current limit orders placed on exchanges.
As seen below, Dogecoin will likely face minimal resistance until it reaches $0.088, where sellers are looking to offload 24 billion DOGE. If this resistance does not hold, DOGE can approach $0.10, where sell-orders of another 1.83 billion DOGE are open.
For the bears to seize the initiative, the price of DOGE must drop below its current support around the $0.070 zone. At this point, buyers have placed orders for over 7 billion DOGE. If this support does not hold, DOGE may test $0.060 again.
Disclaimer
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