Dogecoin’s NVT ratio has been hovering around its all-time highs of late. Over the past few months, a series of spikes have been registered on this front. Interestingly, the price has reacted in a similar way. In this article, we will be analyzing the said trend and chalk out what can be expected from DOGE this time around.
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The Dogecoin NVT-price trend
Before proceeding further, it is essential to note that NVT Ratio compares the network value to the transactional value. A rising number usually means the value on-chain value being transferred is not able to outpace the value of the network.
Dogecoin has registered 4 NVT spikes over the past year. The fifth was created at the beginning of this month. This is how DOGE’s price reacted in every situation:
- On May 23, 2022, when the NVT spiked, DOGE first depreciated by 44% and then rallied back by 58%
- On August 1, 2022, when the NVT spiked, DOGE initially shed 8% of its value and then bounced back by 37% right after
- On December 5, 2022, when the NVT spiked, DOGE dropped by 41% first and then rose by 51%
- On May 1, 2023, when the NVT spiked, DOGE initially dipped by 33% and then rallied by 35%
Thus, the trend is pretty obvious. Every NVT peak has triggered DOGE to first drop in value, and then rise back harder. The latest peak was registered on July 3, and since then, a downtrend is already in play on the daily timeframe. Barring one instance, all downticks have hovered in the 33%-44% bracket. On the other hand, Uptrends has ranged between 37% to 58%. Thus, if history repeats itself this time as well, then DOGE’s price can be expected to continue to drop over the next few days, and then register double-digit gains eventually.
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