Dogecoin Forms Strong Resistance Around $0.20, Price Rally Next?

As of yesterday, the broad crypto market has seen a sudden shift in sentiment with leading cryptocurrencies showing rapid price resurgence after about a week of facing severe corrections. In the middle of this, a new support level has been identified for the world’s leading meme cryptocurrency, Dogecoin.

On Saturday, Nov. 8, popular crypto analyst Ali Martinez showcased an on-chain analysis from Glassnode, which suggests a new resistance level for Dogecoin amid the unstable market conditions.

11,120,000,000 DOGE purchases around $0.20

Notably, a cost-basis distribution heat map from the analytics firm reveals that Dogecoin (DOGE) is facing a critical resistance zone at the $0.20 level, where over 11.12 billion DOGE have been accumulated by investors.

With the heat map showcasing a heavy concentration of Dogecoin holdings around the $0.20 price range, it appears that a large number of holders bought DOGE at or near the $0.20 level. Thus, it has created a significant supply barrier around that zone.

Usually, as observed in other cryptocurrencies, when the price revisits levels like this, previously trapped holders often sell to break even, causing a barrier for the price to move beyond that zone. As such, this turns the area into strong resistance.

While recent weeks have seen Dogecoin experience heightened price volatility, the asset has failed at its multiple attempts to reclaim higher ranges. Hence, the price has once again dropped below this heavy resistance band.

What's next for DOGE?

While the on-chain data suggests that buyers who previously accumulated DOGE at $0.20 may need renewed bullish momentum to deliberately push its price above that level, speculators suggest Dogecoin might have already activated its bear season.

Although yesterday’s sudden rebound has restored a bit of hope to Dogecoin traders, Dogecoin is still maintaining a close below that level, trading at around $0.18 despite seeing a notable surge of over 7%.

Nonetheless, market watchers are optimistic that if Dogecoin manages to break through this resistance zone with strong trading volume, it could trigger a fresh price rally and help it overcome the $0.20 wall.