Dogecoin is a focal point in the cryptocurrency world, and a mix of positive and negative signals are shaping its future. On the one hand, the number of Dogecoin addresses is growing. On the other hand, recent technical analysis gives less reason for optimism in the low and medium term. What must investors make of this dual narrative?

Growing Dogecoin Adoption: The Positive Side

Data from the latest Crypto Daily Trade Signals charts reveals that the number of Dogecoin addresses with a balance has increased to 6.56 million, which is a 20% augment from eight months ago. Such fluctuations in adoption indicate that more people are holding on to their DOGE for further gains. This has turned into a sturdy vote of confidence in the cryptocurrency, while its price has not been able to gain traction.

#Dogecoin Addresses reached 6.56 million
IntoTheBlock’s address metrics highlight the continued growth of the total number of Dogecoin addresses with a balance. Over the past eight months, the number of addresses in the ecosystem has increased by 20.1% to 6.56 million from 5.43 million. The Dogecoin price drop from… photo:twitter.com/A3im2BrcV0

— Daily Cryptocurrency Trading Signals (@cryptodailyTS) August 16, 2024

This optimism is somewhat balanced out by several short-term indicators, however. According to IntoTheBlock, Dogecoin price is trending down despite a steady augment in energetic addresses. The Fear and Greed Index currently stands at 25, which means “Extreme Fear,” a direct indicator that the market is in a state of anxiety. This often leads to increased selling pressure, which pushes prices even lower.

Low-Term Bearish Forecast: Should We Be Worried?

Technical analysis of the cryptocurrency price forecasting platform CoinCodex indicates further actions of the bears in the near future for Dogecoin. Dogecoin is estimated to fall 14% to a target price of $0.087023 by September 16, 2024. This is supported by the fact that Dogecoin has only spent eight days in the black over the past 30 days, indicating a downtrend.

Price volatility has been high at 11% over the past month, indicating extreme price swings and uncertainty in the market. This kind of volatility at these levels, along with such extreme fear in the market, further indicates that there could be more downward pressure on Dogecoin in the coming weeks. In that case, it may not be a good time to invest in DOGE.

Conflicting Signals: What is the Truth?

The contrast between the growing number of Dogecoin addresses and bearish price forecast is quite mysterious. On the one hand, the growing user base can be seen as an ultra-bullish sign: more interested people and prospects for further development. On the other hand, negative technical indicators and fearful market sentiment cast a shadow.

Recently, Dogecoin has been dominated by a falling wedge, which usually has a bullish bias in price action. While this is the case given the market conditions, such a breakout seems unlikely in the near future. With resistance at $0.11, analysts are not sure if it will be reached due to the prevailing bearish sentiment.

Dogecoin is currently in a mixed signals situation. While adoption continues to grow, short-term technical analysis is leaning towards the bearish side. The Fear & Greed Index, combined with recent price performance and high volatility, indicates that the market is not favoring Dogecoin at this point.

Featured image from ZyCrypto, Chart from TradingView