Can Dogecoin Overcome a 11.72 Billion DOGE Selling Barrier?

Dogecoin, the top memecoin by market value at $23.28 billion, is under significant selling pressure, primarily influenced by shifting market sentiment. Over the past year, the asset has seen a sharp decline of 67%, and in the last 24 hours, DOGE has dropped an additional 2.4%.

Key Takeaways

Dogecoin's market cap stands at $23.28 billion, but the asset has faced a 67% drop over the last year.
Current market indicators suggest an accumulation phase despite overall declining sentiment.
A significant increase in daily active addresses indicates growing interest in DOGE.
Recent retail demand has led to $50 million in net purchases, although overall trading volume is declining.
There is a critical selling barrier at $0.20, with 11.72 billion DOGE concentrated at this level, posing risks for price recovery.

In conclusion, while there are signs of resilience and potential in the Dogecoin market, the heavy selling barrier looms large, creating a landscape of uncertainty for investors.

Dogecoin at a critical level as bubble risk and accumulation collide

Despite this downturn, signs have emerged that market watchers should pay close attention to, as these indicators may shape Dogecoin's broader market trajectory.

Current Market Sentiment Shows Accumulation

Market indicators suggest that DOGE might be in an accumulation phase. According to the current Bubble Risk Model, investor sentiment remains subdued. Generally, such signals imply that an asset could be overrated in the market. However, the continuing downward trend of the indicator indicates accumulation rather than a sell-off.

Dogecoin bubble risk

Source: Alphractal

This growing trend of accumulation is supported by an observable rise in on-chain activity. Recent data reveals that the number of daily active addresses has surged, reaching 73,560, as tracked on the latest charts.

Assessing Demand for DOGE

One crucial question is whether the market is witnessing an actual increase in demand for DOGE. Current data hints that there may be such a rise. The most notable growth in demand appears to stem from the spot market, where retail investors have engaged in consistent buying for a week.

The Exchange Netflow metric, which monitors market dominance between buyers and sellers, indicates that buyers currently have the upper hand. Recently, about $3 million worth of DOGE has been purchased, contributing to a total of $50 million in net weekly purchases, which corresponds to slightly more than 2% of its market cap.

DOGE spot exchange netflow

Source: CoinGlass

However, it’s important to note that overall trading volume is declining, signaling a possible waning sentiment that could impact DOGE’s long-term outlook. Nevertheless, growing retail interest in spot trading could lead to notable gains for DOGE in the near future, potentially breaking above the $0.14 mark.

A Significant Selling Barrier Awaits

Despite these bullish signs, DOGE’s potential recovery remains precarious. The liquidation chart indicates a staggering concentration of approximately 11.72 billion DOGE around the $0.20 price level, establishing a formidable sell zone that could pressure the price downward.

Dogecoin liquidation chart

Source: Glassnode

This signifies that if retail traders push DOGE to this price point, a quick price reversal may occur due to the overwhelming selling pressure. Consequently, this selling barrier is one of the most significant risks to DOGE’s upcoming performance.