DOGE and the big question: Will it break the resistance of 0.175 USD to surge?

Dogecoin (DOGE) is currently not experiencing significant volatility, and that is a major issue. This coin has attempted multiple times to surpass the 0.175 USD level, but still cannot create a convincing breakout.

While the capital flow from whales and the funding rate once suggested a potential breakout, new data tells a completely different story.

The activity address is declining

Although the price of Dogecoin increased at the end of June, the number of active addresses did not change significantly. The daily transaction wallet count – an important indicator of retail demand and natural market participation – remained stable, with only slight increases at certain times.

This is a worrying sign. It shows that the efforts to push the price up do not have support from both new and old users.

Active address reduction | Source: GlassnodeWhen the value increases but there is no corresponding increase in the activity of addresses, these price surges often tend to be short-lived. Past Dogecoin breakouts show that spikes in the number of addresses often occur before or after strong market movements. However, this time the absence of those factors has become very evident.

The address tracks the wallets interacting with the network every day. When the number of these addresses decreases or shows no growth, it reflects weak user participation and low transaction demand.

Dogecoin is still undervalued

The MVRV Z-Score of Dogecoin is currently below 0, indicating that the majority of DOGE investors are experiencing unrealized losses. This means that the risk of a sell-off from current investors is relatively low.

According to historical observations, Dogecoin often records strong price increases after the MVRV falls into the negative zone. The price of this coin usually hits a bottom right when the Z-Score begins to recover. However, this time that recovery has not yet appeared, and this creates a difference compared to previous cycles.

DOGE Price and MVRV Z-Score | Source: GlassnodeIn previous cycles, when the MVRV index turned negative and then reversed upwards, it often signaled the beginning of a new bullish phase. However, the current trend of DOGE is sideways, indicating that even though this coin is undervalued, the market has not yet shown signs of accumulation.

MVRV Z-Score is an indicator that compares the current market value of DOGE with the average cost of all holders. When this indicator is negative, it indicates that average wallets are in loss, which is often a signal of a low price, but this value can only become positive if there is an increase in buying pressure from new participants.

The price structure is still declining

Dogecoin is currently trading in a descending triangle pattern, with the resistance level at 0.175 USD having been tested multiple times but not broken. Meanwhile, support levels around 0.161 USD have been repeatedly broken and then recovered, indicating that the price structure is gradually weakening over time.

The RSI index is on a downward trend, even as the price of DOGE maintains higher lows – this is a classic sign of bearish divergence. This indicates that although the price seems stable, the fundamental strength of the coin is weakening. The stability of the number of active addresses further reinforces this observation, reflecting weak participation from users.

DOGE Price Chart 1 Day | Source: TradingViewRSI measures market momentum. When RSI decreases combined with an increase in DOGE price, it indicates that buyers are gradually losing control, a signal often seen before the price drops back. Therefore, even if DOGE can break the resistance level of 0.175 USD, this is not a strong signal, as the price could drop back at any time.

If the price continues to drop below 0.161 USD once again, the descending triangle pattern will continue and push the price lower. The invalidation zone of this structure will be below 0.156 USD, and if the price breaks that level, a deeper correction will unfold.

However, if the bulls can surpass the resistance level of 0.175 USD, the next resistance will be around 0.183 USD, opening up opportunities for a positive reversal.

Lilly