According to new reports, Dogecoin's market sentiment has plummeted significantly, turning negative once again as its price consolidates. This bearish trend raises the question of whether it is time for investors to buy or sell off their DOGE tokens to avoid future losses.
Dogecoin Market Sentiment Dwindles
On Tuesday, crypto analyst Ali Martinez announced on X (formerly Twitter) that Dogecoin's market sentiment has turned negative, signaling a shift in investor confidence in the same coin.
Martinez shared a price chart highlighting two key metrics suggesting that DOGE's market sentiment is drastically reducing. The first metric, indicated by the blue bars as social volume, represents the number of social media mentions around Dogecoin.
As a same coin, social sentiment plays a crucial role in DOGE's price trajectory. Increases in social volume typically suggest increased interest or hype in a cryptocurrencywhich ultimately fuels demand and increased adoption.
The second metric, shown by the red bars on the chart, reflects Dogecoin's weighted sentiment. This metric tracks the overall positive and negative sentiment surrounding DOGE on social media. When the weighted sentiment falls below the zero line into the negative territory, it signals that investors and traders are adopting a pessimistic outlook on the cryptocurrency.
In the chart, the weighted sentiment for DOGE has turned negative multiple times, especially during periods of consolidation. Consequently, Martinez has revealed that the recent shift in Dogecoin's market sentiment is attributed to its ongoing price consolidation.
The analyst has overmised that investors and traders are growing increasingly impatient with DOGE's prolonged consolidation. The price has remained stagnant despite its rise to $0.4. With the feeling turning bearishthe Dogecoin price could face additional challenges, leaving investors uncertain whether to buy or sell off their holdings to mitigate potential losses.
Moving on, Martinez has observed that the red sentiment line on the DOGE chart has dipped below 0.597, reflecting negative market sentiment. This bearish indicator, combined with Dogecoin's slow price growthsuggests that interest and optimism surrounding the meme coin have declined for now.
Analyst Says The Longer The Consolidation, The Bigger The Rally
Many in the crypto market have expressed concerns over the recent change in market sentiment due to DOGE's extensive price consolidation. However, crypto analyst Cephii proposed that this consolidation could catalyze a significant Dogecoin price rally.
According to the analyst, “The longer we consolidate here, the bigger the rip.” This suggests that Dogecoin could experience an explosive price rally once its consolidation ends. Based on his price chart, the analyst has predicted a potential rise toward $0.8 ounce DOGE can break past key resistance areas.
Additionally, Cephii has pointed out that Dogecoin's social metrics remain strong. This is likely due to the continued bullish feeling within the Dogecoin community, even amid the negative shifts in market sentiment.
Featured image created with Dall.E, chart from Tradingview.com
