Dogecoin Price Analysis: DOGE battles stubborn downward force hindering recovery
- Dogecoin recovery from $0.3 comes to a halt at the 100 SMA and the descending channel's upper boundary.
- The low network growth reveals reduced adoption, contributing to the slow uptrend.
- The transaction history model highlights robust support.
Dogecoin recoiled from support at $0.3 following the breakdown earlier this week. The losses incurred saw DOGE drop from $0.45, denting most investors' pockets. However, a recovery wave seems to be traversing the crypto space, calling more buyers to return from the sidelines.
The meme coin is trading at $0.33 after rising to highs around $0.35. Its upside has been capped by the 100 Simple Moving Average (SMA) on the four-hour chart in conjunction with the descending parallel channel's upper boundary.
Dogecoin bulls hunt for higher support to set the framework for more gains
The primary goal in the bullish camp is to secure higher support, preferably above the channel's middle boundary. Note that holding at this level may avert potential losses to $0.3 and $0.28, respectively. On the other hand, bulls will have undisturbed time support to focus on the mission toward $0.45.
DOGE/USD four-hour chart
The In/Out of the Money Around Price (IOMAP) by IntoTheBlock on-chain model directs our attention to the region between $0.33 and $0.34. This is healthy support hosting nearly 39,000 addresses that previously bought around 6.9 billion DOGE. As long as this support stays intact, Dogecoin will assume market stability, allowing bulls to concentrate on lifting the price higher.
Dogecoin IOMAP chart
On the upside, the model reveals relatively weaker resistance zones. An immense increase in buy orders would most likely bolster Dogecoin above $0.4. A break above this level could call more buyers into the market, thereby setting the pace for gains heading to $0.45 and beyond.
Looking at the other side of the picture
Low network growth has been witnessed over the last 30 days. The "Daily Active Addresses" model by IntoTheBlock shines a light on the number of new addresses joining the network each day. Following a 30-day high of nearly 100,000 addresses per day, Dogecoin currently receives an average of 27,000.
Dogecoin network growth chart
Realize that low network growth is a bearish signal. As the number of new users dwindles, the adoption of cryptocurrency is affected. This also impacts network activity; hence speculation goes down. Therefore, bulls lack the energy to sustain an uptrend which leads to a price dip or consolidation.