Bearish pressure has halted Dogecoin’s renewed upward momentum after the market gained traction a few days ago, bringing its price just below the $0.20 level. While DOGE struggles with the pullback, many participants are still holding on to the meme coin, reflecting robust confidence in its potential.
Dogecoin Holders Stays Strong Amid Volatility
Dogecoin is having trouble regaining its upward momentum, and crucial metrics are showing critical levels that could dictate its next course of action. World-leading on-chain data and financial platform Glassnode has outlined a notable trend in Dogecoin’s supply metrics as the meme coin faces bearish pressure.
Glassnode reported that development after navigating the Dogecoin UTXO Realized Price Distribution (URPD) metric. Data from the key metric shows that over 7% of DOGE’s supply is concentrated at the $0.20 level, which is the third-largest cluster after $0.17 and $0.07.
Furthermore, large capital inflows were recorded at this level on January 22, however, wallets probably purchased DOGE sooner, increasing their cost basis. Presently, the $0.20 mark could serve as resistance in the short term.
In the event that this level is breached, there will not be much DOGE available until the next significant URPD cluster at $0.31. The platform highlighted that a sharp leg-up is more likely to occur because of this gap since there is less resistance between them. Thus, Glassnode has hinted at a possible breakout when volume picks up.
Following an examination of the Dogecoin HODL Waves metric, Glassnode revealed that about 15% of DOGE’s supply was last moved 6 to 12 months ago. Meanwhile, this shift was identified among holders who purchased the meme coin prior to the rally between November and December last year and are still holding on to the asset. Such behavior among these investors is an indicator of a strong conviction in DOGE’s prospects.
Data from the metric shows that the 3-6M HODL Waves began to rise since the beginning of March, which suggests significant purchases from many investors during the bounce from $0.32 to $0.41 in January. However, should prices recover at these levels, some would attempt to sell at a break-even point, causing resistance for DOGE ahead.
Spot-Driven DOGE Futures Volume
Glassnode’s analysis also covers DOGE Futures Open Interest (OI) performance in the last few days. Currently, Dogecoin’s futures open interest is valued at $1 billion compared to the average for November/December of over $3 billion.
Additionally, the 7-day SMA of futures volume is recovering from the bottom, remaining close to October 2024 levels, which is majorly driven by spot rather than speculative leverage. While futures volume has risen, DOGE Funding Rates have dropped close to neutral over the past 2 days, reflecting another reason that the rally is more spot-driven and not by excessive long positioning.
Given the positive advancements, Dogecoin’s price might recover its upward movements shortly. Crypto analyst Trader Tardigrade revealed that DOGE is breaking out of a 3-month Descending Trendline, signaling its potential for a short-term rally.
Featured image from Adobe Stock, chart from Tradingview.com
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