Dogecoin (DOGE) has been experiencing a steady decline since early April. The popular meme coin’s value has created a descending wedge, a formation typically linked with a potential bullish breakout.
Nonetheless, the outlook may not be as bright as it appears. Recent market behaviors indicate that Dogecoin could be encountering substantial resistance, which might push its price even lower.
Dogecoin Is Leaning Toward the Bears
The current market sentiment surrounding Dogecoin is decidedly bearish, as shown by the MVRV (Market Value to Realized Value) long/short differential. This indicator is essential for evaluating investor behavior and suggests that short-term holders are in a more advantageous position, often leading to increased selling pressure.
As short-term holders anticipate further price drops, many are likely to sell off their holdings, exacerbating the negative sentiment. Thus, Dogecoin’s price is facing downward pressure, compounding the bearish atmosphere around the meme coin.
Read more: Dogecoin (DOGE) vs Shiba Inu (SHIB): What’s the Difference?
Additionally, market depth indicates strong buying activity at a 10% premium from the current price, around $0.116. Historically, approximately 31.42 billion DOGE has been acquired at this level. However, currently, about 75 million DOGE is being sold.
This establishes $0.116 as a crucial resistance level for Dogecoin. With substantial selling persisting at this price level, market depth suggests it will likely continue to serve as an important barrier, further solidifying the broader bearish trend.
DOGE Price Prediction: No Rally Yet
Currently, Dogecoin is trading within a descending wedge at $0.105. For a bullish reversal to occur, the coin would need to establish $0.108 as a solid support level. If achieved, the subsequent target would be $0.118, a key resistance point that may lead to additional gains.
However, the substantial selling pressure at $0.116 makes a continued downtrend more likely. Should Dogecoin break below its current support at $0.094, it might drop towards $0.077, representing a 25% decrease. This level serves as the next significant support for the altcoin.
Read More: Dogecoin (DOGE) Price Prediction 2024/2025/2030
Conversely, if Dogecoin can successfully flip $0.108 into support, it might create the possibility for a breakout. In that scenario, the cryptocurrency could potentially invalidate the bearish outlook and aim for $0.172 in the long term, representing a 55% increase. However, breaching $0.118 must come first, which remains a significant hurdle for DOGE.
Disclaimer
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