Dogecoin’s recent price surge stalled just below $0.20. Despite the setback, many Dogecoin holders remain confident. Let’s look at some key factors influencing its price.
Strong Holder Sentiment
Data from Glassnode reveals interesting trends. A significant portion (over 7%) of Dogecoin’s supply is clustered around the $0.20 mark, creating potential resistance. However, a large purchase happened around this price point in January, suggesting strong belief in Dogecoin’s future. Breaking through $0.20 could lead to a more substantial price increase as the next major resistance level is much higher, at $0.31.
Another key indicator is the “HODL Waves” metric. Around 15% of Dogecoin’s supply hasn’t moved in 6-12 months. This shows strong conviction from investors who bought during the November-December rally. While some might sell at break-even if the price recovers to earlier highs, this long-term holding suggests significant belief in Dogecoin’s potential. A rise in 3-6 month HODL Waves since March also points to significant buying during the January price bounce.
Futures Market Activity
Glassnode also analyzed Dogecoin futures. Open interest is currently lower than the November/December peak, but futures volume is rising, driven mainly by spot trading rather than speculative leverage. Funding rates have also dropped to near neutral, further suggesting a more organic price movement. This is a positive sign, indicating less reliance on speculative bets.
Analyst Predictions
Crypto analyst Trader Tardigrade noted that Dogecoin is breaking out of a three-month downtrend, suggesting a potential short-term price rally.
Overall Outlook
The combination of strong holder sentiment, reduced speculative activity in the futures market, and a potential breakout from a long-term downtrend points towards a possible short-term price recovery for Dogecoin. However, the $0.20 level remains a key resistance point to watch.
