The key support level of $0.1184 for Dogecoin has been tested. Indicators suggest a short-term adjustment in price.
Dogecoin [DOGE] is nearing the key support level of $0.1184, having tested it four times since March 19.
This mild price drop comes after a moderate surge in price over the past seven days. Recently, DOGE has not recorded any significant changes.
The price has been consolidating near the support area since June 19.
At the time of writing, DOGE is priced at $0.1184, up 1.25% in the past 24 hours and up 3.38% in the past 7 days, with a market capitalization of $17.4 billion.
However, trading volume has surged significantly by 25.71%, with $497.7 million worth of DOGE changing hands in the past 24 hours.
The short-term decline in price and long-term surge indicate that DOGE will adjust to the key support level in the near term.
The stochastic RSI is in the overbought zone, indicating an imminent short-term correction.
Increased profit-taking pressure
Analysis of profit and loss balance data from IntoTheBlock by AMBCrypto shows that 75.77% of DOGE addresses are still in profit.
This high profitability rate, along with bearish sentiment, has triggered a wave of profit-taking among short-term investors.
Outflow of funds indicates potential downward trend
AMBCrypto’s analysis of IntoTheBlock data shows a significant increase in fund outflows. The surge in outflow indicates that investors are moving their DOGE holdings to exchanges.
Given the current market conditions, this increase in fund outflows is significant.
As bears capitalize on their profits, this selling pressure could potentially push the price of DOGE to the key support level of $0.1184 for the fifth time since March 19.
Liquidity determining DOGE’s fate
In the precarious situation of DOGE, AMBCrypto further analyzed market liquidity at the $0.1184 level to determine its near-term direction.
Data from Coinglass’s liquidation heat map shows that a drop below $0.120 could trigger a chain reaction of liquidations, potentially increasing downward pressure.
Meanwhile, if bulls defend the support level, DOGE could rebound and test the resistance at $0.132.
Therefore, Dogecoin is at a crossroads. The correlation between profit-taking pressure and buyer support at $0.1184 is crucial in determining whether DOGE can hold its ground or face further declines.
