Dogecoin (DOGE), the self-proclaimed “internet’s money,” faces a critical juncture. A 5% price increase could trigger a sell-off by investors who bought in at a key support level, according to on-chain data analysis.
DOGE currently sits at around $0.11, and a rise above $0.112 would see it reclaim a significant support zone. However, data from IntoTheBlock reveals that over 84,000 addresses hold a combined 35.12 billion DOGE purchased between $0.103 and $0.112.
This large accumulation zone presents a potential hurdle. With the broader cryptocurrency market still grappling with uncertainty, many investors who bought in at this price point may be eager to break even and sell their holdings. This selling pressure could turn the $0.112 level from support into resistance.
Is there a silver lining for DOGE? The current market lull could be an opportunity for bargain hunters. Social media engagement for DOGE has plunged to its lowest point in the past year, potentially indicating an oversold condition. Additionally, the coin’s Market Value to Realized Value (MVRV) ratio sits at -8%, which some analysts view as a sign of potential future price increases.
However, a shadow looms over DOGE’s future performance. Unlike the 2020/2021 bull run where it dominated the meme coin scene, DOGE has been lagging behind its peers. Newer meme coins like PEPE, WIF, and FLOKI have attracted significant capital and new users. This suggests that DOGE may not respond as readily to positive market shifts compared to the previous boom period.
In the immediate future, a short squeeze could provide a temporary boost. Data suggests that a price rise to $0.111 could trigger a liquidation of short positions, potentially driving the price upwards. Still, the dominance of Ethereum-based meme coin MOG, which recently surged 17%, highlights the intense competition DOGE faces within the meme coin category.
Overall, DOGE stands at a crossroads. A potential sell-off looms at a reclaimed support level, but bargain hunters and a short squeeze could offer temporary relief. However, DOGE’s struggle to keep pace with its meme coin rivals raises concerns about its long-term prospects.