Dogecoin has experienced an 11% decline over the last week. However, there's potential for this downturn to stabilize, given that DOGE is currently positioned just above a critical on-chain support zone.
Dogecoin Hovers Above Key On-Chain Support Area Recent data from IntoTheBlock, a market intelligence platform, reveals that DOGE is currently situated above a significant on-chain demand zone. In on-chain analysis, these "demand zones" signify price ranges where numerous investors have accumulated their holdings.
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These zones are identified using blockchain data, specifically looking at the average price at which addresses acquired their coins. The graph indicates that Dogecoin's price levels in proximity to its current value correlate with the number of addresses that share a similar cost basis.
Reportedly, DOGE appears to have a sizable demand zone just below its current position. | Source: IntoTheBlock on X The size of the dots on the graph corresponds to the number of addresses that purchased DOGE within each respective range. Notably, the range between $0.096 and $0.139 stands out as the largest in terms of investor acquisition.
More precisely, this range saw 409,330 addresses acquiring a total of 45 billion DOGE. The significance of these demand zones lies in their potential impact on market behavior.
Typically, these cost basis levels hold significance for investors, potentially prompting reactions when the cryptocurrency's spot price revisits them.
While the reaction of a few investors may not sway the broader market, a collective response from many within the same narrow range could significantly influence price dynamics upon retesting.
Given the substantial number of addresses that acquired DOGE in the $0.096 to $0.139 range, a retest of this demand zone could carry considerable implications for the meme-inspired cryptocurrency.
With the current DOGE price positioned above this range, investors who bought within it are likely enjoying profits. Historically, such demand zones have served as sturdy support levels for the cryptocurrency.
Investor psychology often plays a pivotal role in these scenarios. Those holding profitable positions might anticipate further price increases, potentially increasing their holdings.
Conversely, investors at a loss may contribute to resistance, selling out of fear that prices will decrease further. "On the upside, DOGE could encounter resistance around the $0.16 mark, where 20 billion DOGE is currently held at a loss," notes IntoTheBlock.
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The extent to which the on-chain demand zone below can halt any further decline in the memecoin remains to be seen if its price descends enough to warrant a retest.
DOGE Price Analysis Dogecoin has faced a challenging week, with its price plummeting approximately 11%. Following this downturn, DOGE is now trading around $0.142.
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