- Dogecoin price fails to break above $0.2 as losses linger toward $0.1.
- The transaction history on-chain model adds credence to the bearish narrative by showing immense resistance ahead of DOGE.
- Support at $0.16 could invalidate the downtrend as bulls shift the focus to $0.2 and higher price levels toward $0.3.
Dogecoin returns to trading in the red following a failed attempt to make headway above $0.2 over the weekend. Towards the end of last week, DOGE retested support at $0.16 (a region essential in stopping losses in June). This allowed the bulls to control the price, but their reign was short-lived immediately after the meme coin stepped above $0.2.
A correction is underway, with losses gaining ground toward the same support at $0.16. DOGE teeters at $0.178 at the time of writing. If sideways trading fails to take precedence, another retest of $0.16 could pave the way for losses heading to $0.1.
DOGE/USD four-hour chart
Dogecoin Price Impeding Breakdown Gains Traction
In/Out of the Money Around Price (IOMAP) on-chain model by IntoTheBlock brings to light a robust resistance zone running from $0.188 and $0.173. This area houses around 43,000 addresses that previously bundled up 9.1 billion DOGE. Surmounting this seller congestion zone will be challenging because most of the buying pressure emanating from the support at $0.16 could be absorbed.
Dogecoin IOMAO model
On the downside, the lack of a formidable support area adds credence to the bearish outlook. In other words, if overhead pressure intensifies, bulls will have a difficult time preventing losses from wreaking havoc. Therefore, it is imperative to say that Dogecoin’s path with minor hurdles is downward, at least for now.
The number of active addresses on the Dogecoin network has continued to fall in the past 30 days, according to on-chain data by IntoTheBlock. The “Daily Active Addresses” shows that 51,500 addresses interacted on the network on July 18, down from a 30-day high of 125,000. Note that a slump in the level of on-chain activity is usually a bearish activity. The drop implies that speculation has dwindled, and bulls do not have the momentum to sustain an uptrend.
Dogecoin Active Addresses On-chain Metric
The technical outlook in the four-hour chart affirms the bearish narrative, especially with the drop from areas around $0.2. Bears will gain more control if the Moving Average Convergence Divergence (MACD) sends a sell signal as the 12-day EMA crosses below the 26-day EMA.
Similarly, support at $0.16 must be defended at all costs. Otherwise, we expect massive sell orders to be triggered as Dogecoin nears $0.1.