Dogecoin Price Dips After Musk Comments, But Long-Term Holders Offer Stability

Dogecoin (DOGE), the popular meme-based cryptocurrency, has recently experienced a turbulent price movement following a failed breakout attempt. A subsequent decline was further fueled by comments from tech billionaire Elon Musk, who clarified that the U.S. government has no plans to use Dogecoin in any capacity. This statement led to uncertainty among investors, causing a temporary setback for DOGE. However, despite the dip, long-term holders (LTHs) are actively accumulating more of the coin, signaling confidence in its future.

Mixed Signals in Dogecoin’s Market

Dogecoin’s Network Value to Transaction (NVT) ratio has surged to a three-month high, indicating a disparity between its market value and transaction activity. This could suggest declining investor confidence, as fewer transactions relative to value typically signal hesitation in the market.

Meanwhile, Musk’s remarks regarding DOGE’s governmental relevance added to the uncertainty, dampening short-term sentiment. However, Dogecoin’s macro trend suggests potential stabilization. The HODLer Net Position Change metric, which tracks net accumulation by long-term holders, has recently spiked. This means that despite the price drop, LTHs are buying more DOGE, showing strong conviction in its long-term potential.

This accumulation trend acts as a crucial support mechanism, potentially preventing further price declines. If sustained, it could establish a price floor, insulating the cryptocurrency from prolonged bearish pressure. Once market sentiment shifts, these holders might play a pivotal role in driving the next bullish wave for Dogecoin.

DOGE’s Price Outlook: Can It Rebound?

Currently, Dogecoin is trading at approximately $0.163, just below a key support level of $0.164. Over the past five days, the coin has declined by 16%, following an unsuccessful attempt to break the $0.198 resistance level. This failure suggests that immediate upward momentum is unlikely unless a significant catalyst emerges.

Given the existing market conditions, a sharp decline seems unlikely in the near term. Instead, DOGE may consolidate between its current price and the $0.198 resistance level until stronger bullish signals emerge. However, if Musk’s comments continue to weigh on sentiment, the coin could test lower support levels around $0.147. A prolonged dip below this threshold could indicate further bearish trends and delay any potential recovery.