Dogecoin (DOGE), the meme-inspired cryptocurrency, is currently facing a hurdle after being rejected at a key resistance level. However, analysts remain optimistic about its future trajectory, citing healthy on-chain activity and a crucial support zone.
DOGE recently encountered resistance at the 50% Fibonacci retracement level of $0.1420. This level is a common technical indicator used to identify potential reversal points in an asset’s price. Following this rejection, DOGE has retraced towards its weekly support level of $0.1182.
This support level holds significant weight for two reasons. Firstly, technical analysis suggests it could act as a springboard for a price bounce. Secondly, on-chain data from IntoTheBlock reveals that nearly 195,000 addresses accumulated DOGE tokens within a price range of $0.0998 and $0.1334, with an average price of $0.1168. This concentrated buying activity creates a strong support zone around the $0.1182 level.
Adding to the bullish sentiment is a surge in Dogecoin’s development activity. Santiment’s Development Activity Index indicates a sharp rise in project development on Dogecoin’s GitHub repository. This suggests the team behind DOGE is actively working on improvements, which can be seen as a positive sign for the coin’s future.
Technical indicators like the Relative Strength Index (RSI) and the Awesome Oscillator (AO) on the daily chart further bolster the bullish case. Both indicators are currently positioned above their respective medians, suggesting potential buying pressure.
However, a break below the crucial support level of $0.1018 could invalidate the bullish thesis and trigger a price drop of 10% towards the July 5th low of $0.0913.
Overall, Dogecoin finds itself at a crossroads. While facing a temporary setback, the confluence of technical analysis, on-chain data, and development activity suggests a potential price rally if DOGE can hold above the $0.1182 support zone.