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Dogecoin Price Analysis: Bearish or Recovery Ahead?
Dogecoin (DOGE) experienced a significant 14% price decline this week following a strong rally earlier in the month. The pullback is primarily driven by profit-taking at a six-month high, as short-term investors cash in on recent gains. This selling wave reflects growing uncertainty among traders about Dogecoin’s near-term price potential.
Profit-Taking Hits Six-Month Peak
After last week’s impressive price surge, many DOGE investors decided to sell, pushing the realized profit/loss ratio to its highest level in six months. These profit-takers seem skeptical about further upside, triggering a sharp drop from recent highs. The wave of selling pressure has led to a bearish reversal in Dogecoin’s price momentum, putting the coin under notable strain.
Long-Term Holders Provide Stability
Despite the selling spree, the Liveliness metric—which tracks the activity of long-term holders (LTHs)—continues to decline, suggesting that major stakeholders are holding onto their positions. This reluctance to sell by LTHs has historically provided crucial price support during volatile periods, helping prevent deeper crashes. Their commitment may be the key factor that limits further losses for DOGE.
Price Outlook: Risk of Further Decline or Possible Recovery?
Currently, Dogecoin trades around $0.233, below the important resistance level at $0.245. If selling persists, the price could break below the $0.220 support, possibly testing $0.198 in the near future. This scenario points to a prolonged bearish trend as profit-taking dominates.
However, if DOGE successfully reclaims $0.245 as support, combined with steady backing from LTHs, the coin might bounce back, aiming for $0.268. Such a recovery would challenge the current bearish outlook and signal renewed momentum.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
