Dogecoin might see more bullish rides as selling pressure eases.
Several on-chain indicators support the potential rally to the $0.5 level.
On Monday, the price of Dogecoin (DOGE) breached a key resistance at $0.40, rebounding from a 15% pullback. This week’s on-chain transaction flows suggest DOGE is heading toward $0.50 as selling pressure has declined by 95%.
DOGE Reclaims $0.4
Dogecoin recently made headlines in the crypto market, boasting impressive price jumps that have reignited interest in memecoins. Notably, the price of Dogecoin surged to a three-year high of $0.44 on November 14. Many attributed the surge to Trump’s confirmation of Elon Musk’s role in the projected Department of Government Efficiency (DOGE).
Traders began locking in profits on November 12, following 185% monthly gains. As a result, DOGE had a 15% fall before beginning Tuesday at $0.37. However, this week’s Dogecoin on-chain transaction flows suggest a drastic reduction in selling pressure, potentially leading to another price uptrend.
According to Santiment, the Age Consumed metric peaked at 1 trillion DOGE on November 12 as traders started recording profits. The Age Consumed Metric shows the amount of tokens that changed addresses on a specific date, multiplied by the time they last moved. It is a proxy for monitoring spikes and dips in selling activity among long-term holders.
The DOGE November 12 rally stalled within 24 hours of the spike, as the long-held coins flooding the markets overshadowed short-term demand. The selling pressure has lessened this week, though, as the Age Consumed value dropped 95% to 49 billion DOGE on Monday.
Simply put, a decline in the Age Consumed indicator suggests fewer long-held tokens are currently traded. This indicates DOGE is on track to see further price gains for two reasons. Firstly, spikes in DOGE demand could trigger rapid price upswings, with fewer dormant coins entering circulation.
Additionally, the hesitancy of long-term traders to sell despite triple-digit gains in November may encourage potential recruits to remain bullish.
Dogecoin’s Technical Analysis
Moreover, the Volume-Weighted Average Price (VWAP) shows promising bullish momentum for DOGE at $0.395. This value is below the current market price of $0.399 as DOGE soared by another 0.11% in 24 hours.
This indicates an increase in short-term demand since most buyers now pay more to fill their orders than wait on the market. VWAP considers price and volume to help traders determine an asset’s fair value.
Per short-term price projections, the Donchian Channel indicator shows DOGE faces initial resistance at $0.44, which coincides with last week’s peak. A breakout above $0.44 would confirm a continuation of the uptrend, with a potential next milestone of $0.50.
This scenario is consistent with the accumulating period, given that DOGE has maintained its position above the VWAP. Conversely, Donchian Channels highlights that the midline, currently around $0.29, serves as critical support. Thus, a correction toward the lower channel limit of $0.20 could result from any breach below this level, refuting the bullish narrative.
