Dogecoin Price Possibly Nears Bottom Below $0.08

The Dogecoin price may be entering a bottoming phase. A specific on-chain metric, the so-called CVDD (Cumulative Value Days Destroyed), has been providing accurate bottom signals for DOGE for years. According to analyst Joao Wedson, the next signal will be triggered when the price drops below $0.08. At the time of writing, Dogecoin stands at $0,09. an increase of 5% in the past 24 hours.

What does the CVDD indicator say?

The CVDD indicator measures the cumulative value of coins that are moved after a long period of inactivity. When holders who have been idle for a long time start selling their Dogecoin, it signals that the market is capitulating. Historically, such a signal has been followed by strong price rallies.

The chart from Alphractal shows that the CVDD has accurately marked the bottoms of Dogecoin several times in the past, including in 2015, 2018 and 2020. Each time the price touched the indicator or briefly dipped below it, a substantial rally followed. The current Dogecoin price is just above the level at which the signal would become active again.

Bottom level around $0.08

According to Wedson, $0.08 is the critical level to watch. If the price briefly drops below that, he sees a buying opportunity for investors willing to hold the memecoin for an extended period. He describes it as a capitulation phase, a moment when weak hands sell and stronger hands build positions.

The analyst notes that this pattern has recurred throughout Dogecoin’s history. Whether history will repeat itself this time is, of course, uncertain. Dogecoin is trading at $0.09 at the time of writing, still just above the threshold level mentioned. Whether the price will fall further towards $0.08 or recover remains to be seen.