An analyst has recently highlighted how Dogecoin has reclaimed a significant on-chain demand zone. This crucial move could pave the way for the cryptocurrency to achieve higher price levels.
Dogecoin Faces Minimal On-Chain Resistance at Upcoming Price Levels
In a detailed analysis shared on X, analyst Ali Martinez discussed how Dogecoin (DOGE) has recently overcome a significant on-chain supply wall. On-chain supply ‘walls’ refer to price ranges that represent the cost basis of a substantial number of investors. Here’s a closer look at the data from IntoTheBlock, shared by the analyst, which illustrates the current state of various Dogecoin price ranges.
Analyzing the On-Chain Data
In the provided graph, the size of each dot indicates the amount of DOGE that addresses on the network last purchased within the corresponding price levels. Notably, the $0.108 to $0.111 range stands out due to the large dot associated with it.
This specific range includes the cost basis for approximately 62,270 addresses that collectively bought 36.08 billion tokens of the memecoin within these levels. For any investor, their cost basis or acquisition price is significant, as it often influences their trading behavior during price retests.
Impact of Retesting Major Demand Zones
When Dogecoin retests a price range where only a few investors have purchased, it typically doesn’t elicit a strong reaction. However, retesting a major demand zone, like the $0.108 to $0.111 range, can lead to simultaneous moves by holders, causing fluctuations in the coin’s value.
Investor psychology plays a crucial role in how traders react to retests of their cost basis. If investors who were previously at a loss see a retest, they might opt to sell, fearing a future price decline. This selling reaction allows them to exit at their break-even point, recovering their initial investment.
Previously, Dogecoin’s spot price retested the $0.108 to $0.111 range from below. However, the resistance from sellers was insufficient to hold back the memecoin, resulting in a sharp price jump above this range within the last 24 hours.
Future Price Potential for Dogecoin
The chart indicates that unlike the recently surpassed range, the upcoming levels are relatively thin in terms of supply. According to Martinez, “If DOGE holds this level, it could confirm a bullish breakout. With no major supply walls in sight, the path to $0.150 looks clear!”
Achieving the $0.150 mark from the current Dogecoin price would signify an increase of over 31% for the memecoin. The coming days will reveal whether the asset can maintain its rally and reach this ambitious price level.
Current DOGE Price
As of now, Dogecoin is trading around $0.114, marking an increase of more than 9% over the past seven days.
By monitoring these key on-chain metrics and understanding investor psychology, traders can better anticipate potential price movements and make informed decisions. As always, staying updated with the latest analysis and market trends is crucial for navigating the dynamic world of cryptocurrency investments.
