Can Dogecoin break $0.081? Heavy supply stands in DOGE’s way

Dogecoin’s [DOGE] price action has been indecisive. Both accumulation and distribution signals are well underway as its price trades within a triangle pattern, with each rebound facing an equal rejection.

The memecoin’s circulating supply dynamics are aligning with the technical outlook of DOGE, yet long-term bullish hopes seem to be fading.

What are DOGE’s key levels to watch?

Dogecoin‘s UTXO Realized Price Distribution (URPD) identified $0.081 as the first major resistance for a complete market structure reversal.

However, smaller key levels lie in between, marking areas where significant DOGE supply was acquired. These zones act as supply zones until the price trades above them.

The nearest supply zone below $0.081 sits at $0.0739, where roughly 10 billion DOGE were accumulated. At $0.081, about 35 billion tokens were purchased, marking a stronger resistance level. 

A breakout past the major resistance would expose $0.1774 as the next major resistance where 25 billion DOGE were bought. Other significant supply zones were at $0.0887, $0.1478, and $0.1626.

Notably, Dogecoin trades above the demand zone at $0.0690. Here, well over 5 billion DOGE were accumulated, putting the zone in focus as more bullish signals form.

In fact, the TD Sequential has flashed buy signals on the monthly, weekly, three-day, and daily charts.

Dogecoin’s technical outlook aligns with KEY supply zones

The supply zones were aligning with the technical outlook.

Dogecoin was consolidating, with the first minor resistance of the URPD at $0.0739 aligning with the triangle’s slanting resistance. Breaking past this level hinted at the memecoin escaping the accumulation phase.

Meanwhile, the key resistance of the URPD was above the triangle’s top at $0.0800. Buyers turning this level into support would signal a shift in market structure to bullish.

However, hopes of a rebound continued to sink as these supply zones remained more rigid. In fact, there was a bearish MA Cross, reinforcing earlier bearish sentiment.

At press time, the RSI Divergence indicator also printed a bearish signal. Moreover, long liquidations were increasing, suggesting the price of the memecoin was plummeting.

Still, the memecoin is maintaining a key support zone on the hourly chart, according to the Anchor Trend indicator. Analysts argue the recovery is set to continue unless the Anchor Trend indicator is broken.

The supply zones identified by the URPD continue to pose hurdles to Dogecoin’s ongoing recovery. However, recovery hopes remain intact unless support at $0.0690 is lost and confirmed by a retest of the downward continuation.

Final Summary

• Dogecoin was trading below key supply zones at $0.08130 and $0.1774, further draining hopes of long-term holders. 
• Dogecoin’s price was starting its recovery but was yet to break out of the triangle consolidation pattern.