Dogecoin Slows Down: What Needs To Happen For New DOGE Highs?
April 10 2024 - 1:00PM
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The market intelligence platform IntoTheBlock has pointed out what
may need to happen before Dogecoin can continue its uptrend and
reach new highs. Dogecoin Has Notable On-Chain Resistance Near
$0.20 In a new post on X, IntoTheBlock has discussed the recent
trend in the price of DOGE and what it would take for the memecoin
to register a new high for the year. According to the analytics
firm, Dogecoin must solidly break above the level where on-chain
resistance is currently the strongest. In on-chain analysis, a
level’s potential to act as resistance or support is based on the
number of coins that were last bought at it. Related Reading:
Bitcoin Nears Two Important On-Chain Levels: What Happened Last
Time Below is a chart that shows this investor cost basis
distribution for DOGE at price ranges near the cryptocurrency’s
current spot value. The distribution of tokens based on where they
were last transacted on the blockchain | Source: IntoTheBlock on X
Here, the size of the dot represents the number of coins acquired
within the corresponding price range. In terms of the levels ahead,
the prices around $0.20 have held the cost basis of the most number
of tokens out of the ranges listed. To be more particular, about
32,000 addresses bought 3.78 billion DOGE around this mark. Since
this price is above the current spot value of the asset, all of
these investors would be holding at a loss. Generally, the cost
basis is a special level for investors, and as such, they are prone
to reacting when the asset retests. Investors holding at a loss may
tend to show a selling reaction when such a reaction happens. This
is because investors like these may fear that the cryptocurrency
will dip again shortly, so exiting at the break-even mark might not
sound like a bad idea, as they would at least be able to avoid any
losses in the future. Of course, if only a few investors are
involved, any such reaction from the market wouldn’t be relevant to
the Dogecoin price. However, if a large number of investors show
this reaction, the asset may very well feel some visible
fluctuations. Related Reading: Bitcoin 40% Of Way Through Bull Run
If This Metric Is To Go By This is why the strength of an on-chain
level’s ability to act as resistance or support lies in the number
of coins acquired there. More coins mean a potentially larger
reaction once the level is retested. As the $0.20 level holds the
cost basis of a notable number of investors, it’s possible that it
could act as a source of major resistance when Dogecoin retests it
next. IntoTheBlock says that, for DOGE to continue its recent rend,
it would have to break past this barrier solidly. DOGE Price
Dogecoin has experienced a drawdown over the last couple of days,
which has taken its price to $0.188. Looks like the price of the
memecoin has seen a plunge recently | Source: DOGEUSD on
TradingView Featured image from Kanchanara on Unsplash.com,
IntoTheBlock.com, chart from TradingView.com
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