Dog-themed cryptocurrency Dogecoin (DOGE) might be approaching a crucial moment as it hovers above a significant on-chain support level, according to data from IntoTheBlock. This support level is crucial for the cryptocurrency, especially as market conditions show potential signs of weakness.
The market has seen whipsaw price movement since the week's start as investors assessed key inflation data and interest rate decisions that hinted at the U.S. Federal Reserve's future direction. Dogecoin was not immune to the dismal price movement, oscillating between $0.133 and $0.15 thus far this week.
According to IntoTheBlock, historically, 45 billion DOGE was acquired at an average price of $0.115, creating a strong demand zone that has provided substantial support in the past.
DOGE is currently positioned above a significant on-chain support level.Historically, 45 billion $DOGE was acquired at an average price of $0.115, indicating a strong demand zone that could prove important if the market shows weakness.On the upside, DOGE may face resistance… pic.twitter.com/o1xxftcGsn
— IntoTheBlock (@intotheblock) June 13, 2024
This level is critical because it represents a large volume of Dogecoin held by investors, who are likely to defend their positions if the price approaches this threshold. Should the market experience a downturn, this support level could be key in preventing further declines.
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At the time of writing, DOGE was down 0.71% in the last 24 hours to $0.1429. As Dogecoin awaits its next major move, on-chain data highlights the importance of the $0.115 price point, where a significant amount of Dogecoin has changed hands. This suggests that many traders might view this price as a good entry point, providing a cushion against price drops. The strength of this support level will be tested if selling pressure increases, making it a crucial area to watch.
However, it is not all smooth sailing for DOGE. On the upside, there is a looming challenge at the $0.16 mark. Here, 20 billion DOGE is currently held at a loss. Investors who bought in at this level may seek to exit their positions as the price approaches, potentially creating selling pressure that could cap further gains.
That being said, Dogecoin might be on the verge of a crucial price test: will the 45 billion DOGE support level hold, providing a springboard for future gains? Or will the 20 billion resistance prove too strong, leading to a consolidation or even a downturn? The outcome of these scenarios might shape the DOGE price trajectory in the short term.