The Dogecoin price faces risks despite posting a remarkable 17% gain over the past two weeks. Although the cryptocurrency is trading within an ascending channel, data analyzed by experts from Nansen reveals bearish signals that could anticipate a short-term correction, creating uncertainty among investors.
The main warning sign comes from the Chaikin Money Flow (CMF) indicator, which is currently showing a bearish divergence. This means that while the asset’s price has been rising, capital flow has been decreasing, suggesting underlying selling pressure. Furthermore, on-chain data confirms this trend, as large investors, known as “whales,” have reduced their holdings by 1% in the last fifteen days. This decline in confidence from the market’s most influential players adds an additional layer of concern. The current digital economy relies heavily on the trust of its participants.
Another key factor is the behavior of the market in general. If buying pressure fails to hold, Dogecoin could test its immediate support level at $0.2574. A break below this mark could trigger a steeper decline, pushing the price toward the next critical support at $0.2018. This volatility is a market characteristic, so investors should watch these levels closely. Conversely, if demand manages to recover, the asset could surpass the resistance at $0.2797.
Warning Signs on the Horizon?
Dogecoin’s current scenario is a clear example of the cryptocurrency market’s duality. On one hand, optimism can drive rapid rallies, but on the other hand, technical indicators offer a deeper, more cautious view. The CMF divergence and the withdrawal of whales are hard data that should not be ignored by those trading this asset. These signals suggest the recent rally may lack a solid foundation to be sustained long-term.
The current situation highlights the importance of comprehensive analysis before making investment decisions. Although Dogecoin has proven to have a strong and resilient community, its valuation remains susceptible to speculation and shifts in market sentiment. The next price movements will depend on whether new demand can counteract the warning signs that technical indicators and on-chain data are clearly showing. The immediate future is uncertain, and caution appears to be the most prudent strategy.
