The price of Dogecoin recovered the $0.40 zone on Wednesday, rising 10% from the 20-day low of $0.36 reached on Tuesday.
The number of wallets holding DOGE increased by 60,000 between December 2 and December 11, signaling an influx of new participants buying the dip.
The Volume Delta technical indicator shows that DOGE's rebound is supported by a significant increase in market liquidity.
The price of Dogecoin recovered the $0.40 territory on Wednesday, as bulls staged a 10% rebound in the last 24 hours. On-chain data trends for DOGE show that a large number of new participants capitalized on the cryptocurrency market correction phase to buy the dip.
The price of Dogecoin recovers to $0.40 as the cryptocurrency market enters a recovery phase.
After a volatile start to the week, the price of Dogecoin has joined other high-ranking crypto assets in a rapid recovery phase on Wednesday. According to recent market reports, the cryptocurrency market rebound seems to be linked to traders' positive reaction to the latest consumer inflation report released by U.S. regulators on Wednesday.
While Bitcoin's price led the rebound, recovering to $101,000, Dogecoin also made significant strides reversing a considerable portion of the losses recorded during the cryptocurrency market crash on Monday.
60,000 new wallets acquired DOGE amid the cryptocurrency market drop.
Investors are betting on another imminent rate cut from the Fed after the publication of the latest U.S. CPI data, and evidently have propelled Dogecoin and the rest of the cryptocurrency market towards an early rebound. However, a closer look at the underlying on-chain trends shows that strategic traders capitalizing on the market drop also played a crucial role in the 10% resurgence of DOGE.
Validating this perspective, the Santiment chart below monitors real-time changes in the number of active funded wallets on the Dogecoin blockchain network. This serves as a proxy to measure the rate of new user acquisition around critical market events.
But as cryptocurrency markets succumbed to downward volatility over the past week, 60,000 new user wallets acquired DOGE in the last week, bringing the total number of holder addresses to 6.86 million at the time of publication on December 11.
When a large number of new wallets are created during a market drop, it often signals an influx of new strategic traders capitalizing on falling prices to enter the market. The new capital inflows from these 60,000 new DOGE wallets effectively increase short-term demand.
Evidently, this contributed to setting the stage for the 10.2% rebound in DOGE's price observed when market sentiment turned bullish after the release of the U.S. CPI report on Wednesday.
Dogecoin price forecast: Is a breakout of $0.50 in sight?
Dogecoin (DOGE) has shown resilience with a 10.2% rebound following the recent market drop, driven by bullish momentum after the U.S. CPI report. The daily chart illustrates key technical indicators aligning for a possible extended recovery; however, resistance and support levels require close attention.
The main resistance to monitor is the $0.46 level, marked by the upper Bollinger band, representing a critical psychological threshold.
A breakout above this area could pave the way for the next target of $0.50, a level last tested during previous bullish sentiment waves.
The Volume Delta data supports a scenario where constant buying pressure could push DOGE to new short-term highs, but traders should be cautious of profit-taking near $0.50.
On the downside, immediate support is at $0.38, aligned with the lower Bollinger band.
Breaking this level could invalidate the bullish outlook, exposing DOGE to further corrections. A drop below $0.38 would open the way to retest $0.36, where stronger support is located.
