Dogecoin: Why $0.11 is crucial for DOGE to prevent massive selling
Dogecoin has experienced a sharp decline over the past week, dropping by 11.42%. Analysts argue that DOGE needs to reclaim $0.11 to prevent massive selling.
Dogecoin dropped by 11.42% over the past week.
- Indicators suggest that DOGE needs to reclaim $0.11 to prevent further decline.
Over the past month, Dogecoin [DOGE] has seen a significant increase of 13.66% in price charts, rising from a low of $0.088 to a high of $0.132.
However, in the past 24 hours, DOGE has shown a moderate improvement, increasing by 2.8%. In fact, at the time of writing, Dogecoin was trading at $0.108, reflecting a 11.422% decrease in weekly charts.
The recent price movement raises questions about whether Dogecoin will recover and continue its monthly uptrend or if bears will take control of the market.
As Ali Martinez and Coin have noted, popular cryptocurrency analysts have mentioned conditions that need to be met for another sustainable uptrend.
What market sentiment is saying…
Coin stated in their analysis that the current market conditions indicate a prevailing bearish sentiment.
Source: X
According to this analyst, DOGE has broken out of the macro falling wedge, which is a bearish signal.
Additionally, the memecoin has lost all key 1-day and 4-hour moving averages (MA), which is another bearish signal.
Therefore, the analyst argued that Dogecoin needs to return to $0.08 and find another support level before attempting an uptrend.
On the other hand, Martinez mentioned the address 60210 as an example, which holds 36.40 billion DOGE at $0.11.
Source: X
According to this analysis, DOGE must reclaim the resistance level of $0.11 to maintain a bullish outlook. If the memecoin fails to do so, it could lead to widespread selling by investors looking to cut their losses.
Typically, as seen last week, such widespread selling results in further price declines and the extension of the bearish trend.
What do DOGE charts suggest?
Undoubtedly, the analysis provided by Martinez and Kelvin presents a bearish outlook. The question is, what do other metrics indicate?
Source: Santiment
To begin with, the open interest of Dogecoin on exchanges has decreased from $224 million to $129.6 million over the past week.
This decline indicates that investors are closing their positions without any new inflows, resulting in a bearish market sentiment.
Source: Santiment
Furthermore, the price divergence of Dogecoin’s Daily Active Addresses (DAA) turned negative three days ago. A negative DAA divergence indicates that fewer users are interacting with the DOGE ecosystem.
Therefore, the recent rally is not fully supported by fundamental principles but is instead driven by speculation.
Source: IntoTheBlock
Finally, the Daily Active Addresses of Dogecoin have decreased from 144.8k to 74.7k over the past four days. The decline in active users indicates a decrease in demand or interest in the memecoin.
In simple terms, although DOGE has shown moderate improvement on daily charts, weekly losses outweigh these recent gains.
Therefore, if the current sentiment continues, can DOGE hold its next support at $0.098? However, a reversal could see Dogecoin reclaim $0.011105.
