Dogecoin Price Analysis: DOGE Recovery Runs Into Immense Resistance
- Dogecoin's pivotal price action at $0.4 speaks volumes over indecision in the market.
- The transaction model reveals robust resistance and support, hinting at a possible consolidation.
Dogecoin has not broken the generally down-trending market since the all-time high of $0.75. A descending parallel channel limits movement at the time of writing.
The drawback to $0.22 earlier this week allowed investors to reenter the market at a lower price. Dogecoin paced upward, stepping briefly above $0.4, but resistance at $0.44 stood in the way.
Dogecoin could settle for consolidation
Dogecoin is trading at $0.39, while the price sits in the upper column of the descending channel. The channel's middle boundary has protected its immediate downside. Holding above this area may allow bulls to focus on making a confirmed break above $0.4 and perhaps restart the recovery toward the all-time high.
Bulls face an uphill battle making progress above $0.4. Besides, more delay is expected to come into the picture at the channel's upper edge. The 50 Simple Moving Average reinforces the resistance at this level.
DOGE/USD four-hour chart
As mentioned, Dogecoin depends on the descending channel's middle boundary support. Thus, holding onto this zone is crucial to the uptrend. Otherwise, closing the day below it may trigger massive seller orders. On the downside, support is envisaged at $0.3 and the lower boundary. If push comes to shove, DOGE will retest $0.22 before a significant recovery comes into the picture.
The IOMAP on-chain model by IntoTheBlock validates the sluggish price action. According to the transaction metric by IntoTheBlock, Dogecoin is limited by the resistance between $0.42 and $0.43. Here, around 4,950 addresses previously scoped up 5.24 billion DOGE. Slicing through this resistance will not come easy, hence the need for traders to brace for the ultimate delay.
Dogecoin IOMAP chart
On the flip side, robust support has been accorded to Dogecoin as per the IOMAP. This buyer congestion zone runs from $0.36 to $0.37. Here, 48,000 addresses previously purchased nearly 5.8 billion DOGE. Dogecoin will likely settle for consolidation in the near term with robust support and resistance in the picture.
Looking at the other side of the fence
According to the four-hour timeframe, the Moving Average Convergence Divergence (MACD) has a bullish outlook. As the MACD line crosses above the signal line, buyers tend to take positions; thus, building the momentum to sustain the much-awaited recovery.