Going long on Dogecoin [DOGE]? Here’s what you need to know

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion

• DOGE could aim at its December high in the next few weeks.
• Long-term holders of the memecoin saw gains. 

Like most altcoins, Dogecoin [DOGE] rallied in the new year. It rose from $0.06756 to $0.09266, posting 37% gains. The rally ended after Bitcoin [BTC] uptrend momentum slowed and dropped, prompting DOGE to fall to the $0.08000 zone.

At press time, DOGE rallied to a critical selling pressure level after Bitcoin [BTC] reclaimed the $22K zone. The selling pressure zone could undermine a strong upward momentum. But DOGE could push through if the forthcoming Fed announcement triggers the market positively. 

Read Dogecoin [DOGE] Price Prediction 2023-24

December high: Bull’s next target?

Source: DOGE/USDT on TradingView

The On Balance Volume (OBV) has risen since the beginning of the year, boosting buying pressure and DOGE prices. At press time, the Relative Strength Index (RSI) was 61 after retreating from the overbought zone and making a U-turn, showing strong bullish momentum. 

Therefore bulls could attempt to go beyond the selling pressure zone and retest the overhead resistance at $0.09266. However, a favorable Fed announcement could bolster BTC, pushing DOGE to aim at its December high of $0.10689, offering a 20% potential gain. 

The above bullish bias will be invalidated if bears push DOGE below the demand zone (green)  around $0.08000. Such a downswing could find a steady hold at $0.07500.

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Long-term holders cashed out recent gains

Source: Santiment

According to Santiment, DOGE’s recent rally saw long-term holders enjoy brief gains around 12 January. However, the gains dipped, and losses were incurred before another round of recovery offered smooth tidings. 

At press time, DOGE posted 3.55% to long-term investors, as evidenced by the positively elevated 365-day MVRV (market value to realized value) ratio. Additional gains could be likely if the recovery overcomes the selling pressure zone at $0.09000. 

DOGE also recorded a spike in Age Consumed coins, indicating that idle DOGEs were exchanged between addresses. The trend could also suggest long-term holders offloading their assets to cash out from recent gains. 

Santiment’s supply distribution showed key whale categories offloaded their asset (distributed/sold) to lock in gains and could undermine DOGE’s effort to overcome the current selling pressure zone. Therefore, investors should be cautious of the selling pressure zone.

Source: Santiment