Dogecoin [DOGE] has been on a steady downtrend since December, struggling to gain bullish momentum after failing to flip the $0.36-$0.38 zone into support a month ago. Since February 17, the memecoin has already lost 13%, bringing it closer to a crucial support level at $0.215. The question remains: Can the bulls defend this level and spark a reversal?
Market Structure and Key Levels
DOGE’s daily chart initially reflected a bearish market structure, which intensified at the end of January when the price dropped below the swing low of $0.305. The failure to hold the 50% retracement level further fueled bearish sentiment.
Currently, Dogecoin is approaching the 78.6% retracement level at $0.215. Historically, the $0.2-$0.215 range served as a strong resistance during DOGE’s rally in March 2024. If these levels now act as support, bulls may see a glimmer of hope. However, a potential decline in Bitcoin’s [BTC] price could exert downward pressure on the broader altcoin market.
On-Chain Indicators Suggest Accumulation
On-chain data from Santiment suggests that DOGE’s recent dip may be a medium-term buying opportunity. Two key indicators, Mean Coin Age (MCA) and Market Value to Realized Value (MVRV) ratio, reinforce this outlook.
- Mean Coin Age (MCA): The steady uptrend in MCA indicates accumulation, despite the ongoing price downtrend. This suggests that long-term holders are refraining from selling, a sign of confidence in future price appreciation.
- MVRV Ratio: Currently at -31%, the lowest in three months, this metric shows that holders are experiencing significant losses. Historically, such low MVRV ratios have preceded strong recoveries as selling pressure diminishes.
Supply Distribution and Inflation Concerns
Supply distribution data shows accumulation among most investor cohorts, particularly those holding between 100,000 and 10 million DOGE. However, whale addresses (holding over 100 million DOGE) have shown hesitation in recent weeks.
Also Read: Dogecoin (DOGE) Price Prediction: Can Strong Support at $0.16-$0.19 Propel It to $3?
Although Dogecoin’s annual issuance of five billion DOGE makes it slightly inflationary, the growing number of holders in February suggests increasing demand. If accumulation continues, DOGE could be poised for a rebound, making the $0.215 level a critical test for the bulls.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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