Dogecoin [DOGE]’s 10.25% weekly rally has been impressive, outperforming several high-cap altcoins. With this rally now stalling at $0.193, FOMO could kick in. However, there is no buying frenzy yet, and DOGE is still struggling to break above $0.20. In this market, a $0.74 target seems like a distant dream.

As overhead supply zones continue to build up, the road ahead for DOGE looks difficult, especially if it aims to break through and reach that level.

Dogecoin’s valuation is running faster than its activity

Dogecoin has secured its place in the top 10 crypto assets with a $26 billion market cap. However, it’s no secret that the coin’s valuation has been running faster than its activity.

Despite a recent rally of 10.25%, new and active addresses remain low, and the coin is yet to break above $0.20.

Moreover, Dogecoin’s Network Value to Transaction (NVT) ratio has reached a three-month high, indicating that its market cap is outpacing on-chain transactions.

Source: Glassnode

This lackluster network activity is evident in the low new and active address count, which is lagging behind pre-election levels. During November’s breakout, new addresses surged past 100k as DOGE broke through $0.40. In contrast, only 12,629 new addresses were created today.

This stat highlights that DOGE’s recent rally appears to be fueled more by speculative interest than by fundamental factors.

Dogecoin is known for its “high-risk, high-reward” nature, which usually attracts FOMO. However, despite the impressive rally, FOMO has yet to kick in. This is because, despite attempts to push higher, the coin is encountering resistance and bouncing back.

Unless DOGE manages to break above $0.20 convincingly, with increased volume to follow through, it is likely to remain capped structurally. As a result, reaching the $0.74 target seems like an optimistic goal at this juncture.

No sign of a supply shock yet

At the time of writing, Dogecoin was down 0.8%, displaying some overvaluation according to TipRanks. However, on a brighter note, Options volume just went up by 9.11%.

Furthermore, derivatives Open Interest reached a monthly high of $1.87 billion, as traders flocked back to the derivatives market.

Source: Coinglass

This massive inflow of capital into derivatives is setting the stage for a classic scenario of blind greed. In the last 24 hours alone, $3.11 million worth of long positions got liquidated.

Adding to the selling pressure, whale activity has also decreased significantly. Nearly 4,000 addresses holding over 10k DOGE pulled out their funds, showcasing decreasing confidence among larger holders.

Therefore, that $0.74 target seems like a distant pipe dream. At least until DOGE manages to rectify its weak spots and sparks some genuine FOMO.