Dogecoin (DOGE) currently encounters a significant resistance level at the 100-day Exponential Moving Average (EMA) of $0.1073. Recent on-chain data reveals a 10% decline in daily active addresses this week. This decrease indicates a waning demand for the Dogecoin network. Additionally, dormant wallets are becoming active again, which further signals a bearish outlook for the cryptocurrency.
As of Friday, DOGE trades slightly higher at approximately $0.1010. However, if the resistance at $0.1073 holds, analysts predict a potential decline of about 24%. This downturn could lead DOGE to retest the next support level at $0.0782.
Technical Indicators Suggest Bearish Sentiment
Technical indicators reinforce the bearish sentiment surrounding Dogecoin. The Relative Strength Index (RSI) currently sits below its neutral level of 50. Meanwhile, the Awesome Oscillator (AO) also trades below zero, indicating a lack of upward momentum. These indicators suggest that a bearish trend may be imminent for DOGE.
Declining Network Activity Raises Concerns
The decline in daily active addresses reflects lower network activity. Santiment’s Daily Active Addresses index tracks this metric over time. A decrease in active addresses signals diminished demand for the Dogecoin blockchain. Moreover, the Age Consumed index shows that spikes in dormant tokens moving can indicate local price tops or bottoms.
Historically, these movements have preceded declines in Dogecoin’s price. The most recent uptick on August 6 hinted that DOGE might be poised for a downtrend.
Key Resistance Level to Watch
Despite the bearish outlook from both on-chain metrics and technical analysis, a critical factor remains. If Dogecoin manages to close above the $0.1073 resistance level on a weekly candlestick, it could invalidate the bearish thesis. Such a development may trigger a rally, allowing DOGE to revisit its higher resistance level at $0.1435.
In conclusion, traders should closely monitor these levels and indicators as Dogecoin navigates this critical phase.
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