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Dogecoin Price Prediction – Why the $0.21-Level May Be Key for a Reversal
The recent bearish trend in Dogecoin (DOGE) has left investors worried about the future of the memecoin. The price action has been unimpressive, with DOGE falling below its May low on June 20. Despite this, analysts at AMBCrypto believe that the $0.21-level may be a crucial turning point for a potential reversal.
According to recent reports, Dogecoin’s price action has shown a distinct bearish trend over the past five weeks. The coin erased the 58% rally it made in the second week of May and fell below its May low on June 20. However, experts at AMBCrypto have identified the $0.21-level as a critical resistance point that could potentially shift long-term bias bullishly.
It is important to note that DOGE’s price action has been bearish, with the exchange netflows metric displaying negative values over the past two weeks. This could be a sign of accumulation, indicating that investors are buying up the coin in anticipation of a future reversal.
Furthermore, Dogecoin saw significant spikes on its coin days destroyed (CDD) metric on June 14 and 17, respectively. These spikes reflect increased selling pressure and may not necessarily be a sustained trend like those seen in November-December 2024 or June-July 2023. Therefore, it’s premature to conclude that there is persistent distribution on-chain.
The cost basis distribution heatmap for Dogecoin provides further insights into the current market sentiment. The $0.182-$0.211 area had three distinct bands of supply, indicating strong resistance levels. If DOGE recovers and reaches these levels, fearful holders may decide to exit their positions at break-even, making a stronger recovery more challenging.
However, similar scenarios have played out in the past. In August-September 2024, Dogecoin’s price fell below key demand zones but managed to recover several months later. There is hope that a similar scenario could unfold over the coming months, especially considering the exchange outflows witnessed over the past two weeks.
In conclusion, it appears that the $0.21-level holds significant importance in determining DOGE’s future trajectory. A reversal at this point would be crucial for long-term investors seeking to capitalize on potential gains.
Source: ambcrypto.com
