Dogecoin Price Hovers at Crucial Support, Facing 20% Downside Risk: Bearish Sentiment Prevails, But Network Activity Growth Offers HopeDespite successfully defending the key support level of $0.1, Dogecoin (DOGE) remains trapped in a bearish scenario
Dogecoin Price Hovers at Crucial Support, Facing 20% Downside Risk: Bearish Sentiment Prevails, But Network Activity Growth Offers Hope
Despite successfully defending the key support level of $0.1, Dogecoin (DOGE) remains trapped in a bearish scenario. With sellers continuing to exert pressure, the largest meme coin faces a potential 20% drop unless a strong rebound emerges.
Market Drivers: 47.8 Billion DOGE in Loss, OI and Trading Volume Decline, Network Growth Surge
Dogecoin price has been hovering below the $0.1 resistance level since rebounding from its $0.08 low, failing to break through. According to IntoTheBlock data, nearly 80% of holders (approximately 47.8 billion DOGE) are facing unrealized losses, with only 17.8% (around 106.2 billion DOGE) in profit. This data indicates a cautious market sentiment, urging investors to exercise vigilance when buying DOGE, as the recovery outlook remains uncertain.
Data from the derivatives market also highlights the need for trader caution. Multiple datasets, including trading volume indicators, Open Interest (OI), options volume, and options Open Interest, exhibit a downward trend. According to Coinglass, OI has decreased by 0.7% to $466 million, while trading volume has dropped by 30% to $714 million, indicating that the market might be experiencing a period of consolidation. While the OI decrease seems minor, coupled with the significant drop in trading volume, it suggests a potential cooling-off period, perhaps in anticipation of a heightened volatility or a consolidation phase following a shift in investor sentiment.
However, a positive sign emerges from the Dogecoin network activity, which has been on the rise since Monday, August 12th. Active addresses, reflecting the number of on-chain interactions with DOGE, rose from zero to 67.51k, while the number of new addresses experienced a significant increase from zero to approximately 12k. The growth in new and active addresses suggests increasing adoption of DOGE, potentially driving price appreciation in the future.
Dogecoin Price Analysis: Is DOGE Poised for Another Crash?
Currently, Dogecoin price finds support at $0.1 but trades below all three bullish indicators, including the 20-day, 50-day, and 200-day EMAs, placing bulls in a highly unfavorable position. DOGE has made multiple attempts to break through the $0.11 resistance level in the past two weeks, only to be met with seller resistance. The converging Bollinger Bands suggest a potential breakout on either side within a narrow range between $0.1 and $0.11.
IntoTheBlock's IOMAP indicates that a drop to $0.08 is significantly more likely than a surge above $0.11, unless there is a positive shift in both technical and fundamental structures.
Dogecoin Price Prediction: Hope and Risk Coexist
Despite the prevailing bearish sentiment, bulls still have a chance to turn the tide. If they manage to hold the $0.1 support level and break through the 20-day and 50-day lines, it would increase the likelihood of the Bollinger Bands breaking through $0.11. Additionally, historical data suggests that every time Dogecoin price falls below the 200-day moving average, a larger surge follows, implying a potential rise to $0.14 or even further to $0.2.
In conclusion, Dogecoin price faces significant challenges, but the hope offered by network activity growth cannot be ignored. The ultimate trajectory will depend on the ability of bulls to defend the $0.1 support level and whether market confidence in DOGE can be reignited. Investors need to closely monitor market developments and make informed investment decisions based on their individual risk tolerance.
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