- Dogecoin price action has been bearish, with the same falling below May’s low
- The $0.21 zone must be flipped to support before long-term bias can shift bullishly
Dogecoin [DOGE] has been on a steady downtrend over the past five weeks. The leading memecoin erased the 58% rally it made in the second week of May and fell below its May low on 20 June.
In a recent report, AMBCrypto highlighted Dogecoin’s blueprint. The gains made in April and May could just be the prologue before a parabolic rally.
In fact, the exchange netflows metric has been negative over the past two weeks – A sign of DOGE accumulation.
Dogecoin holders need not panic yet
Dogecoin saw a large spike on the coin days destroyed metric on 14 June, and another sizeable one on 17 June. It reflected a notable hike in the amount of old coins being transacted and indicated selling pressure.
However, the latest CDD uptick is not yet a sustained trend, like it was in November-December 2024 or June-July 2023. Therefore, it may be too early to conclude that there is persistent distribution on-chain, which would point towards capitulation (like 2023) or heavy profit-taking (like late 2024).
The cost basis distribution (CBD) heatmap is a visualization of Dogecoin’s supply density at various price levels over a period of time. Warmer colors imply higher supply and reflect strong supply/demand zones.
The $0.182-$0.211 area had three distinct bands of supply. They tried and failed to hold back the DOGE bears. This means that if Dogecoin recovers, fearful holders might choose to exit at break-even at these levels, which could make a stronger recovery tougher.
In August-September 2024, the price fell below key demand zones, but was able to recover a couple of months later. There is hope that a similar scenario might play out in the coming months, especially considering the exchange outflows seen over the past two weeks.
