Dogecoin’s Bearish Signal: A Bullish Indicator?

Despite a low Market-Value-to-Realised-Value (MVRV) Z-Score of 0.28, typically associated with market capitulation, Dogecoin's price continues to rise, creating higher highs and lows. This juxtaposition of low on-chain sentiment and resilient spot bids is unusual. Analyst @Kev_Capital_TA highlights that previous cycle tops saw much higher Z-Scores (11 in 2017 and 16 in 2021), suggesting Dogecoin hasn't experienced a true bull run yet. The current situation is attributed to restrictive monetary policies by the Federal Reserve and the European Central Bank (ECB). The Fed's maintained interest rates and continued quantitative tightening, along with the ECB's cautious approach to easing monetary policy, are creating headwinds for altcoins. The MVRV Z-Score, comparing market value to realised value, historically indicates market phases: above +9 signifies tops, -1 to +1 represents crypto winters, and below -1 signals capitulation. Dogecoin's current 0.28 score falls within the winter band, yet the price is significantly higher than its 2022 lows. This is because the realised cap is climbing alongside the market cap, indicating that dormant supply is changing hands at higher costs, and the average on-chain holder lacks significant paper profits. Future Fed rate cuts are anticipated, but neither the Fed nor ECB are considering new asset purchases. The analyst believes Dogecoin's low MVRV suggests limited downside, but significant upside depends on a shift in global liquidity, which isn't expected soon. Therefore, while the current situation appears bullish, explosive growth is likely contingent upon changes in global monetary policy.

(Source: https://www.newsbtc.com/news/dogecoin/bear-signal-dogecoin-why-thats-bullish/)