Dogecoin has been one of the best-performing assets in the cryptocurrency market over the past month, outperforming blue-chip cryptocurrencies such as Bitcoin. The price of meme coins rose more than 26% in May, while the value of BTC rose about 19%, according to data from CoinGecko.
However, the latest on-chain data shows that despite DOGE’s positive price performance, investors are still not optimistic about DOGE. The question here is what impact the unwavering bearish situation will have on the Dogecoin price.
How will bearish sentiment help Dogecoin price?
In a recent post on the X platform, renowned cryptocurrency expert Ali Martinez stated that market sentiment towards Dogecoin is currently bearish. This on-chain disclosure is based on a weighted sentiment indicator that tracks overall positive and negative sentiment towards the cryptocurrency.
The weighted sentiment indicator is built based on two sub-indicators: namely emotional balance and social scale. As the name suggests, sentiment balance is an indicator that measures the difference between positive and negative emotions among investors at a specific point in time.
Social volume, on the other hand, tracks the number of unique posts/messages or the total discussion volume for a particular asset on a social media platform. In essence, the Weighted Sentiment Index is a product of Emotion Balance and Social.
Source: Ali_charts/X
According to Martinez, the last time market sentiment surrounding Dogecoin was weak was in early February, when the price surged 200%. The value of the meme token rose from less than $0.1 to over $0.2 in just over a month.
Historically, investor fears have been a precursor to large price spikes because markets tend to move in the opposite direction of the public. Therefore, if history repeats itself, investors may see the price of Dogecoin rise exponentially, possibly exceeding $0.3.
Whale earned 700 million DOGE in 3 days.
Another on-chain revelation that paints a bullish picture for Dogecoin price is the recent accumulation of whales. As Martinez shared in another post on X, DOGE whales purchased 700 million tokens (equivalent to arou).$112 million in the last three days).
Naturally, a significant acquisition by a large holder could be a bullish signal for the token price. Moreover, the behavior of Dogecoin whales is worth noting, especially considering the size of their holdings and their influence on market dynamics.
However, it’s worth noting that the recent buying spree hasn’t had much of an impact on DOGE’s value. As of this writing, the Dogecoin price is around $0.159, reflecting a 0.5% decline from the previous day.
DOGE price on a descent on the daily timeframe | Source: DOGEUSDT chart on TradingView
Featured image from iStock, chart from TradingView