Analyzing the $11.7 Billion Resistance for Dogecoin: Insights from Analysts

An analyst highlights a significant resistance level for Dogecoin, drawing insights from on-chain supply distribution data.

Key Takeaways

Resistance for Dogecoin (DOGE) is concentrated around the $0.20 mark, with over 11.7 billion tokens having their cost basis at this level.
Many investors may react strongly if DOGE rises to this level, as they attempt to break even from their losses.
Recent data indicates a notable increase in network activity for Dogecoin, with the highest number of active addresses since September.
As of now, DOGE is priced at approximately $0.138, marking a decline of over 7% in the past week.

Dogecoin

Understanding the Resistance Zone at $0.20

In a recent post on X, analyst Ali Martinez shared insights regarding Dogecoin's resistance based on Glassnode’s Cost Basis Distribution (CBD). CBD is an essential metric that reveals the amount of DOGE supply purchased at various price points throughout its history.

Dogecoin CBD
The CBD heatmap indicates a significant supply concentration around $0.20 | Source: @ali_charts on X

The chart provided by Martinez indicates the zone near $0.20 as one of heavy investment activity. Specifically, over 11.7 billion tokens have their cost basis set at this level.

Currently, as DOGE is trading well below this price, holders are facing losses. Should the asset rise to the $0.20 mark, many investors could try to sell their holdings to recover their initial investments. This tendency can make significant cost basis levels serve as potential resistance zones.

Notably, between the current trading price and $0.20, there are no other regions in the CBD with a comparable density of supply. Therefore, Martinez asserts that “$0.20 is the key resistance for Dogecoin.”

It remains uncertain whether DOGE will attempt to retest this level in the near future.

Increasing Network Activity for Dogecoin

In additional developments, the memecoin has experienced a surge in network activity recently. Martinez also highlighted this uptick in another post on X.

Dogecoin Active Addresses
Trend of the Number of Active Addresses over the past few weeks | Source: @ali_charts on X

The chart reflects the Number of Active Addresses, which indicates the daily count of addresses engaged in transactional activities on the Dogecoin network. Recently, this metric showed a peak of 71,589 addresses making transfers—a significant spike not observed since September.

This trend suggests that interest in the Dogecoin network has renewed after a previous decline. However, it remains to be seen if this activity corresponds to accumulation or distribution processes within the network.

Current DOGE Price Status

As of the latest update, Dogecoin is trading at approximately $0.138, which represents a decline of over 7% over the past week.

Dogecoin Price Chart
Recent price trends for Dogecoin | Source: DOGEUSDT on TradingView

In conclusion, the situation with Dogecoin is closely tied to significant resistance at the $0.20 level and a notable increase in network activity, signaling potential movements in the near future.