Analytical platform Santiment reported that an altcoin project widely accepted among investors is approaching the ‘danger zone’ after a short-term rally.
Santiment issues a sell-off warning for this rallying altcoin
Dogecoin, which rallied 30% on Twitter during the week, may be trading in the dangerous zone, according to the latest analysis of the analytics platform. While Santiment says Dogecoin could still go higher despite the recent bull run, a key indicator is signaling an impending sell-off.
In this regard, Brian Quinlivan, Santiment’s marketing director, said that Dogecoin’s market cap over the past 30 days is below the “danger zone” relative to realized value (MVRV). MVRV is the ratio of the current price to the average price. The higher the value, the more likely the asset will come under selling pressure.
Santiment analyst adds that while Dogecoin is seeing some selling pressure from the rising MVRV value, we may see more upside moves for the leading meme coin:
As for the average trading returns, we can see the 30-day MVRV sitting at +11%. Typically this is a “danger zone” when altcoins rise to +20% or more. Considering it’s not that high despite the huge Elon-induced price increase, it could be an extra buffer for prices to go up even more.
These three metrics suggest further bullishness for Dogecoin
Quinlivan then warns that after the last rally, signs are emerging that the meme coin has reached a local top. This included Dogecoin’s active addresses and three metrics: circulation and transaction volumes and whale transactions. According to their analysis:
When these three metrics rise together at a time when a coin is in discrete volatility independent of the market, it’s wise to make a pretty solid bet that a local top almost always occurs here and profit on your own.
Santiment analyst says that Dogecoin’s price action after the volatility this week also does not inspire confidence:
Looking at the chart, it’s hard to get too excited as we suddenly see some correlation breakouts with ‘low highs’ (HL) being consistently made even in the hours leading up to yesterday’s rally. The ‘higher levels’ (HH) will be a much more solid indicator that a bigger rally will start soon.
Altcoin investors did not choose to sell DOGE despite 30% rally
cryptocoin.com As we reported, Dogecoin rallied over 30% after being featured on Twitter’s logo on April 3. Despite this, many small investors chose to buy more DOGE. Some big whales have sold their DOGEs for a profit, but Robinhood continues to hold users.
DogeWhaleAlert reports that Robinhood wallets currently hold 33,562,118,437 Dogecoins on behalf of their clients. That’s $2,770,888,498 worth $2,770,888,498, accounting for 24.17% of the circulating DOGE supply.
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