Dogecoin battles $0.20 resistance, 7% supply at stake
1min read Dogecoin is currently at a pivotal moment, with its price battling resistance at the $0.20 mark. This level is crucial as it could determine the future trajectory of the cryptocurrency's price. Recent on-chain data and trading volumes suggest that the decisions made by investors in the coming days could lead to a significant breakout or a reassessment of positions.
Ask Aime: What will happen next to Dogecoin's price if it breaches the $0.20 resistance?
According to market analysts, if Dogecoin can convert the $0.20 level from resistance into support, it may experience a swift rally toward the $0.31 zone. This prediction is based on the current market dynamics and the behavior of investors. The lack of substantial supply between $0.20 and $0.31 means that a successful breach could lead to an aggressive upward movement, provided that trading volume supports the transition.
Glassnode’s UTXO Realized Price Distribution (URPD) reveals that a significant 7% of Dogecoin’s total supply is concentrated at the $0.20 price point. This heavy accumulation began to increase around January 22, indicating that many wallets had likely accumulated DOGE at lower price points previously. Despite this concentration, the minimal resistance between $0.20 and $0.31 suggests that a successful breach could lead to a rapid price increase.
Glassnode’s HODL Waves chart indicates that 15% of Dogecoin’s supply was last transacted between six and twelve months ago, signaling that many holders are confident in the asset’s long-term potential despite recent fluctuations. Additionally, an uptick in the 3-6 month holding cohort suggests that new investors entered the market during the recent upswing. This continued HODLing behavior suggests a robust belief in Dogecoin’s future, but it also raises the possibility of latent supply being sold if prices revisit prior levels, which could hinder potential upward momentum.
Currently, Dogecoin is trading at approximately $0.195, showing slight gains for the day and remaining above its 50-day moving average. The relative strength index (RSI) stands at 63.05, reflecting moderate bullishness without entering overbought territory. However, it continues to hover just below the pivotal $0.20 ceiling. If the bulls can successfully breach this level with sufficient volume, the minimal resistance throughout the range could allow for a rapid price increase. Conversely, failure to surpass this threshold may lead to a period of consolidation or a slight retracement.
In summary, Dogecoin is on the verge of a decisive breakout at the $0.20 level, which serves as a supply limit with no significant resistance beyond. Present market dynamics favor spot buyers, while long-term holders remain largely passive. The asset’s near-term movement will hinge on trading volumes and trader sentiment. A successful conversion of the $0.20 resistance to support could propel DOGE toward the $0.31 mark. 
