- Dogecoin price is teetering off a support level at $0.293 anticipating a bounce.
- A decisive 4-hour candlestick close above $0.328 will confirm the uptrend scenario.
- If DOGE breaks below $0.213, it will invalidate the bullish narrative.
Dogecoin price is on a slow but steady downtrend, suggesting a lack of bullish momentum. However, its recent bounce from a key support barrier could restart the uptrend.
Dogecoin price looks at reversal
Dogecoin price has held a support level at $0.293 consistently over the past 11 days. Although the May 23 trading session pushed DOGE briefly below the said barrier, it surged quickly, suggesting a large buyer interest present here.
Despite the bullishness, the meme coin has failed to rally higher and has dropped roughly 20% since the swing high at $0.367 on May 26.
Now, a bounce from $0.293 or lower could result in a potential spike in bullish pressure. If this ascent pushes Dogecoin price above $0.328, it will indicate the start of an uptrend. However, only a swing high above $0.367 will confirm a continuation of this bullish trend. In that case, DOGE might rise 8% to tag the immediate resistance level at $0.399.
Under particular circumstances, the meme-themed cryptocurrency might further soar 20% to test the underside of the supply zone that extends from $0.481.
DOGE/USDT 4-hour chart
While the bullish outlook seems plausible from a technical perspective, on-chain metrics point to the opposite.
IntoTheBlock’s Global In/Out of the Money (GIOM) model shows that the support levels are relatively weaker than resistance barriers. For instance, roughly 11.2 billion DOGE was purchased at an average price of $0.363 by 245,000 addresses that are “Out of the Money.”
However, only 3.5 billion tokens were purchased at $0.132 by 234,000 addresses. Hence, a sudden spike in selling pressure could easily push Dogecoin price lower, but a minor buying pressure would not be able to tackle a vast cluster of underwater investors.
Therefore, a bullish narrative will come to fruition only if the buyers push DOGE price above $0.363.
DOGE GIOM chart
On the other hand, if Dogecoin price slices through the support barrier at $0.213, it would invalidate the bullish thesis.
Further adding headwinds to the optimistic scenario is the decline in new addresses joining the Dogecoin network from 104,000 to 21,000 since May 5. This 79% drop indicates that investors are not interested in the meme coin and might either be reallocating their funds or booking profits.
DOGE new addresses chart
Under these circumstances, DOGE might nosedive 25% to the immediate demand level at $0.162.