Dogecoin Sees 10% Drop to $0.074: How Traders are Responding

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Dogecoin (DOGE) has experienced a 10% decline to $0.074 from its three-month high of $0.082 last week. Traders are actively defending the $0.70 support level, prompting an exploration of how on-chain analysis can provide insights into potential price rebounds.

Despite the price correction, trading activity for Dogecoin remains high. On-chain analysis, specifically data from IntoTheBlock, reveals that daily transactions on the network remain at a sufficiently elevated level, even with the price decrease. On November 8th, the network recorded a three-month high of 307,810 transactions. Over the last 10 days, daily confirmed transactions have exceeded 100,000, a phenomenon that occurred only once in the previous 60 days.

Increased transaction volume during a price decline is often indicative of sustained demand for the underlying asset. If this trend persists, the exit of DOGE from its current consolidation phase could be only a matter of time.

Bulls continue to dominate the Dogecoin spot market, as evidenced by the cumulative order books. Examining data from the trading logs of 14 cryptocurrency exchanges, it is revealed that bulls have placed buy orders for 758.5 million DOGE, significantly more than the 710 million DOGE offered for sale by bears.

The current demand surplus over supply by nearly 48.5 million DOGE is a clear sign that many are inclined to buy on dips rather than exit the asset. This typically leads to competitive buying, exerting upward pressure on the price. If this thesis holds true, DOGE holders can anticipate a price rebound in the coming days.

Forecast for Dogecoin: Consolidation Before Rally to $0.1 Global In/Out of the Money (GIOM) data, grouping current DOGE holders based on their entry levels into the market (purchase price), further supports this bullish forecast. GIOM data shows that bulls have established a robust support level around $0.07. If these investors continue to hold resolutely, an immediate Dogecoin rebound could be triggered. However, if bears breach this support wall, the price might fall to $0.06.

Meanwhile, on the path to $0.1, a resistance wall in the form of sell orders may be formed by 266,430 holders who bought 18.01 billion DOGE at a minimum price of $0.081. Overcoming this resistance would clear the way for DOGE to reach $0.1.