An analyst has explained how the next major Dogecoin resistance hurdle would be at $0.084 if the memecoin manages to clear $0.076.
Dogecoin Is Currently Sandwiched Between Major Support And Resistance Levels
In a new post on X, analyst Ali has discussed what the on-chain support and resistance levels are looking like for Dogecoin right now. A price level is said to be an on-chain support or resistance level on the basis of whether a large number of investors share their cost basis at it or not.
“Cost basis” here naturally refers to the average price at which a holder acquired their DOGE. When the spot price is below the cost basis of an investor, they are naturally in a state of loss, while it being above implies they are enjoying positive returns.
The below chart shows what the distribution of Dogecoin investors looks like currently on the basis of the price range that their cost basis lies.
Looks like the current price levels are surrounded by major investor blocks | Source: @ali_charts on X
For any investor, their cost basis is an important psychological level and they may be prone to making some moves whenever the spot price retests it. Thus, if a large number of holders share their cost basis close together inside a particular range, the market could potentially see a sizeable reaction when the asset’s price ventures into the range.
Generally, whenever this retest happens from above (that is, the investors had been in profits before this), the meme coin’s price could feel some degree of support.
The reason behind this is that the holders may tend to believe that if this same level had been profitable earlier, it might be so again in the future, so they participate in some accumulation.
The opposite is the case whenever the Dogecoin price retests the cost basis of a large amount of investors from below. These investors would be tempted to exit at their break-even so the cryptocurrency could face resistance.
From the above graph, it’s visible that the DOGE levels above and below the current price both host the acquisition points of a large number of addresses. In particular, the $0.071 to $0.073 range has the cost basis of almost 200,000 holders, while the $0.074 to $0.076 range has 124,000 addresses.
“Note that support outstrips resistance in strength, hinting at the potential for an upward breakout,” says Ali. If Dogecoin can manage to clear this range of significant resistance off the back of this strong support, the next price level where it will face a hurdle would be around $0.084.
The in-between levels all have a relatively low amount of investors, so at least in theory, the memecoin shouldn’t have too hard a time mowing through them. Especially considering that, once the $0.076 level is through, the block that’s providing resistance right now would turn into a support boundary.
DOGE Price
Dogecoin is currently battling against the resistance offered by the aforementioned range as its price is floating around $0.075.
The price of the memecoin appears to have been going up recently | Source: DOGEUSD on TradingView
Featured image from iStock.com, charts from TradingView.com, IntoTheBlock.net
