Finance

Is Dogecoin Trading at a Premium Despite 2025's Struggles?

2025-04-22

Author: Michael

Dogecoin's Downtrend Continues

Dogecoin (DOGE) is struggling to escape its long-term downtrend, as recent data reveals a concerning decline in on-chain activity and a rising NVT Signal, which could spell trouble for investors.

A Glimmer of Hope or Just a Temporary Bounce?

Currently, Dogecoin is inching back towards the $0.166 mark, the same level it held at the beginning of April. However, this threshold is proving to be a stubborn resistance, with the memecoin facing rejection on April 13. Despite a slight price bounce from the key support level of $0.143, analysts are pointing to potential overvaluation based on the latest metrics.

Understanding Dogecoin's Premium Status

A closer look at the Network Value to Transactions Signal (NVTS) reveals that it may be indicating Dogecoin is trading at a premium. This adjusted metric considers the 90-day moving average of transaction volume instead of daily figures, offering a more nuanced view of valuation.

As the NVTS climbs, it suggests that the market cap of DOGE is outpacing its actual utility measured through transaction volume. Typically, this occurs in environments where an asset’s price stagnates or declines, which reflects a weakening market.

Bearish Sentiment Looms