Rising anxiety among long-term holders is driving social sentiment that points to increased price volatility for Dogecoin (DOGE).
Specifically, the Net Unrealized Profit/Loss (NUPL) metric for long-term DOGE holders has transitioned from a state of belief and denial to optimism and anxiety, according to on-chain data from Glassnode shared by prominent cryptocurrency analyst Ali Martinez on March 30.
Based on this sentiment shift, Martinez cautioned that such transitions often lead to heightened price volatility.
The data points to a downward trend in long-term holder NUPL, suggesting that many previously profitable investors are approaching break-even or incurring losses.
This change in sentiment has coincided with a significant drop in Dogecoin’s price, which has dropped sharply in March, aligning with the broader market trend.
Historically, such shifts in NUPL have preceded price swings, indicating that Dogecoin could face further turbulence in the coming weeks. In this case, the fear of additional losses may prompt some investors to exit their positions, potentially accelerating selling pressure.
Dogecoin’s rebound potential
However, Dogecoin’s technical setup could potentially invalidate the current bearish sentiment. In fact, an analysis shared by Martinez suggested that the meme cryptocurrency is likely to rebound, as it is currently positioned just above the lower boundary of the long-term ascending channel that has guided its price trajectory since 2015.
The coin is hovering above the 0.5 Fibonacci retracement level, around $0.15, a zone often associated with bullish reversals. This technical alignment suggests that the current range could act as a launchpad for further upside if buying pressure intensifies.
Should Dogecoin attract renewed interest, a rally toward the channel’s midline, near $0.4, could follow, potentially testing higher resistance levels around $0.50 and even $1.3, aligning with the 1 and 1.618 Fibonacci extensions.
Meanwhile, although Dogecoin has been weighed down by broader market sentiment, there is still a chance for the coin to embark on a parabolic rally based on select fundamentals.
For instance, a move toward mainstream adoption could trigger significant buying pressure, especially if the Securities and Exchange Commission (SEC) approves applications for spot DOGE exchange-traded funds (ETFs).
DOGE price analysis
At the time of reporting, Dogecoin was trading at $0.17, down 0.17% over the last 24 hours. Over the past seven days, the token has dropped nearly 12%.
The sentiment around the meme coin remains bearish, as indicated by a Fear & Greed Index score of 26, which signals market fear.
Notably, Dogecoin is trading below its 50-day simple moving average (SMA) of $0.2149 and its 200-day SMA of $0.2509, pointing to downward pressure in both the short- and long-term outlooks.
The 14-day Relative Strength Index (RSI) at 46.03 signals neutral momentum, while current volatility stands at 8.93%, suggesting potential upside, should sentiment shift favorably.
Featured image via Shutterstock
