Dogecoin (DOGE) has been on a consistent downtrend since early April. The leading meme coin’s price has formed a descending wedge, a pattern often associated with a bullish breakout.
However, the situation may not be as optimistic as it seems. Recent market activity suggests that Dogecoin might be facing significant resistance, potentially driving its price lower.
Dogecoin Is Leaning in Favor of the Bears
The market sentiment around Dogecoin is currently strongly bearish, as indicated by the MVRV (Market Value to Realized Value) long/short difference. This metric is key in assessing investor behavior and reveals that short-term holders are in a more favorable position, often signaling increased selling pressure.
With short-term holders expecting further declines, many are likely to sell off their positions, intensifying the negative outlook. Consequently, Dogecoin’s price is under downward pressure, reinforcing the bearish sentiment surrounding the meme coin.
Read more: Dogecoin (DOGE) vs Shiba Inu (SHIB): What’s the Difference?
Additionally, market depth reveals significant buying activity at a 10% premium from the current price, around $0.116. Historically, about 31.42 billion DOGE has been purchased at this level. However, at present, roughly 75 million DOGE is being sold.
This positions $0.116 as a critical resistance level for Dogecoin. As heavy selling persists at this price point, the market depth indicates it will likely continue to act as a significant barrier, reinforcing the broader bearish momentum.
DOGE Price Prediction: Not a Rally Yet
Dogecoin is currently trading within a descending wedge pattern at $0.105. For a bullish reversal, the coin would need to turn $0.108 into a strong support level. If successful, the next target would be $0.118, a key resistance point that could open the door to further gains.
However, the significant selling pressure at $0.116 makes a downtrend more probable. If Dogecoin loses its current support at $0.094, it could decline toward $0.077, representing a 25% drop. This level serves as the next major support for the altcoin.
Read More: Dogecoin (DOGE) Price Prediction 2024/2025/2030
On the flip side, if Dogecoin manages to flip $0.108 into support, it could pave the way for a breakout. In this case, the cryptocurrency has the potential to invalidate the bearish thesis and target $0.172 in the long term, representing a 55% rise. However, $0.118 must first be breached for this to happen, which remains a considerable challenge for DOGE.
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