An analyst has explained how the next major resistance hurdle for Dogecoin would be at $0.084 if the memecoin manages to overcome $0.076.
Dogecoin is currently sandwiched between key support and resistance levels
In a new after on X, analyst Ali discussed what the on-chain support and resistance levels currently look like for Dogecoin. A price level is said to be a support or resistance level in the chain, based on whether a large number of investors share their cost basis at that level or not.
“Cost basis” here obviously refers to the average price at which a holder acquired their DOGE. When the spot price is below an investor’s cost basis, he is obviously in a state of loss, while a higher price implies that he is enjoying a positive return.
The chart below shows what the distribution of Dogecoin investors currently looks like based on the price range their cost base lies in.
Looks like the current price levels are surrounded by major investor blocks | Source: @ali_charts on X
For any investor, his cost basis is an important psychological level and he may be tempted to make certain moves when the spot price retests it. Thus, if a large number of holders share their cost basis closely within a certain range, the market could potentially see a significant reaction when the asset’s price moves into that range.
In general, when this top-down retest occurs (i.e. the investors had made a profit prior to this), the meme coin price may feel some level of support.
The reason behind this is that holders may be inclined to believe that if the same level had been profitable before, it could be so again in the future, so they participate in some accumulation.
The opposite is the case when Dogecoin price retests the cost basis of a large number of investors from below. These investors would be tempted to exit at the breakeven level so the cryptocurrency could encounter resistance.
From the chart above, it is visible that the DOGE levels above and below the current price both host the acquisition points of a large number of addresses. Specifically, the range from $0.071 to $0.073 has the cost base of almost 200,000 holders, while the range from $0.074 to $0.076 has 124,000 addresses.
“Note that support exceeds resistance in terms of strength, indicating the potential for an upside breakout,” says Ali. If Dogecoin can manage to clear this series of significant resistance through this strong support, the next price level where it will encounter a hurdle would be around $0.084.
The intermediate levels all have a relatively low number of investors, so in theory it shouldn’t be too difficult for the memecoin to cut through them. Especially considering that once the $0.076 level is passed, the block currently offering resistance would turn into a support boundary.
DOGE Award
Dogecoin is currently battling the resistance offered by the aforementioned range as its price hovers 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
