Dogecoin (DOGE) weakens after negative remarks from Elon Musk: Will a sell-off occur?

Dogecoin (DOGE) has recently faced a series of challenges, including unsuccessful breakout attempts that have led to a price decline. This downward trend has been exacerbated by a statement from Elon Musk, raising concerns about the prospects of Dogecoin.

However, despite those obstacles, this altcoin still shows signs of recovery, primarily due to the accumulation from long-term investors (LTHs), who are taking advantage of the current low prices to increase their holdings of DOGE.

Dogecoin is experiencing mixed signals

The Network Value to Transaction (NVT) index of Dogecoin has surged, reaching a three-month high. This reflects an imbalance between network value and transaction volume, and may also be a sign that investor confidence is waning.

Elon Musk’s recent comments about DOGE continue to stir debates around this cryptocurrency. He confirmed that the U.S. government has no plans to use Dogecoin in any form, which has made market sentiment more negative. Although this statement has dampened expectations for Dogecoin, it has not been enough to shake the coin’s position in the market.

The Network Value to Transaction (NVT) ratio of Dogecoin | Source: GlassnodeFrom a macro perspective, Dogecoin is showing signs of stability, evidenced by a strong increase in the HODLer Net Position Change metric. Long-term investors have been actively accumulating DOGE during the recent price correction, indicating a strong belief in the long-term prospects of this coin.

This accumulation activity not only creates an important support zone that helps the price of DOGE recover but also limits the risk of a deeper decline. The increase in holding positions from the group of LTHs (Long-Term Holders) indicates that they still have high expectations for Dogecoin, despite market fluctuations and controversial statements from Musk.

If the accumulation trend continues, Dogecoin could form a solid price base, acting as a cushion against selling pressure. As market sentiment improves and stability returns, long-term investors may become the driving force that propels Dogecoin into a new bullish cycle.

Change in the net position of Dogecoin Holders | Source: Glassnode## DOGE price fluctuates – Is there a chance for recovery?

Currently, Dogecoin is trading at $0.163, just below the important support level at $0.164. Over the past five days, this coin has dropped 16% after failing to break through the strong resistance level at $0.198. The failure to conquer important resistance levels suggests that DOGE may not be ready for a price surge without external momentum.

Based on the current market developments, Dogecoin is unlikely to decline further in the short term. This coin may recover to the support level of $0.164 and continue to accumulate below the $0.198 range. However, this accumulation process may take time until there is a strong enough market signal to drive an upward trend.

Daily DOGE/USDT Chart | Source: TradingViewThe only scenario that could weaken this neutral-bullish outlook is if Musk’s comments continue to exert negative pressure on DOGE. In that case, this meme coin could slip down to $0.147, prolonging the recent downtrend. If the decline continues, this would reflect a broader bearish sentiment in the market and could hinder Dogecoin’s recovery.

Disclaimer: This article is for informational purposes only and is not investment advice. Investors should do thorough research before making decisions. We are not responsible for your investment decisions.

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