Bullish Control Over Dogecoin: What's the Aim?
Date: 2023-11-17 Author: Dima Zakharov Categories: IN WORLD
Evaluating the Traders' Response to DOGE's Fall
Traders bullish on Dogecoin are fiercely defending the $0.70 support zone. We'll explore through on-chain analysis whether the rise in network activity and market demand could stimulate a rebound in DOGE's price.
Sustained Trading Activity
The price of the popular meme token Dogecoin entered a consolidation phase after failing to break the $0.08 resistance level last week. However, the correction in DOGE's price did not affect trading activity negatively. The chart from IntoTheBlock indicates that despite the price decrease, daily transactions on the network remain notably high.
On November 8th, the number of transactions on the Dogecoin network hit a three-month high of 307,810. Despite the price drop, over the last 10 days, the confirmed transactions have exceeded 100,000, a feat achieved only once in the previous 60 days.
DOGE and Daily Transactions
Typically, an increase in transactions during price decreases indicates sustained demand for the underlying coin.
The chart above demonstrates that DOGE remains resilient and continues to enjoy high demand among bullish traders. If this trend persists, the breakout of DOGE's price from the current consolidation phase appears imminent.
Bulls Maintaining Control Over the Dogecoin Spot Market
Another crucial on-chain indicator confirming the dominance of bulls is the aggregate order books. Exchange order books display the distribution of total buy/sell orders across various exchanges. Recent data from 14 crypto exchanges reveals that bulls have placed buy orders for 758.5 million DOGE, significantly higher than the 710 million DOGE offered for sale by bears.
The current excess demand of nearly 48.5 million DOGE over the supply is a clear sign that many prefer buying on dips rather than exiting the asset. Typically, when demand exceeds supply, buyers compete, exerting upward pressure on the price. Should this thesis hold, DOGE holders may anticipate a price rebound in the coming days.
Dogecoin Forecast: Consolidation Before Rally Towards $0.1
The Global In/Out of the Money (GIOM) data, grouping current DOGE holders based on their market entry levels (purchase price), further supports this bullish forecast.
It shows that bulls have established a robust support wall around $0.07. As depicted in the graph below, 385,090 holders bought 52.3 billion DOGE at an average price of $0.07. If these investors continue to hold, they could prompt an immediate bounce for Dogecoin. However, if bears breach this buying wall, the price might drop to $0.06.
