In the vast and volatile sea of cryptocurrencies, Dogecoin, a digital currency that started off as a joke, still holds a formidable clout in the market. IntoTheBlock, a leading market intelligence platform, has provided some insight into what could potentially drive Dogecoin’s price to new highs.
The often-discussed meme coin is facing substantial on-chain resistance, a term meaning its potential to act as a ceiling or floor, near the $0.20 mark. More simply put, before Dogecoin can rocket to new heights, it needs to break through this twenty-cent bubble that seems to be capping its potential.
IntoTheBlock uses this type of on-chain analysis as a lens to examine the recent trends in Dogecoin’s price. This method is hinged on the number of coins last purchased at a particular price level. Consequently, the resistance or support at each level is directly influenced by the volume of coins traded in that specific price area.
During an in-depth scrutiny of the investor cost basis distribution, the firm noted the distribution of tokens based on where the Dogecoin was last transacted on the blockchain. This yielded a chart where the size of each dot equates to the volume of coins within the corresponding price range.
Of the various price points to consider, the $0.20 mark was found to hold the cost basis of the most tokens. In specific terms, around 32,000 addresses purchased a whopping 3.78 billion DOGE around this level. Given that this price-point overshoots Dogecoin’s current spot value, those investors are essentially staring at losses.
This is why cost basis carries crucial weight for investors. They are likely to react if and when an asset retests that level. While a handful of investors wouldn’t significantly sway the Dogecoin price, a collective reaction could potentially send ripples across the market.
In Dogecoin’s case, the predicted resistance would lie in the number of coins acquired at the $0.20 price point. As such, more coins at this price level suggest a potentially larger market reaction when Dogecoin retests it.
Dogecoin’s fleeting journey over recent days has seen a pullback that nudged its price down to $0.188. To resume its bullish trajectory and scale towards new highs, Dogecoin would need to break past the $0.20 resistance decisively. Only the pounding waves of the future can tell if it’s ready to take that leap. For now, the meme coin continues to float in uncertain waters, carried forward by the unpredictable tides of the cryptocurrency world.