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A cryptocurrency analyst has pointed out how a Dogecoin price level holds the cost basis of a notable amount of the memecoin, potentially making it a major support line.
Dogecoin Traders Last Moved 28 Billion Tokens At $0.074
In a new post on X, analyst Ali Martinez has talked about the latest UTXO Realized Price Distribution (URPD) of Dogecoin. This indicator tells us about the amount of the asset that was last purchased at the various levels visited by it in its history.
Below is the chart for the metric shared by Martinez.
As displayed in the graph, Dogecoin is currently trading around levels where little supply last changed hands. The nearest major cost basis center lies at $0.074, where 28 billion tokens of the cryptocurrency last became involved in transactions.
In recent months, the memecoin has been in a downtrend and if the bearish momentum continues, it’s possible that it could end up retesting this huge supply zone. Currently, these investors are in a state of net unrealized profit, but when the retest will occur, they will drop back to their break even.
It’s hard to say for sure how these holders would react to their cost basis being threatened, but often, traders try to protect their break-even level by participating in more accumulation. Though, this is usually the case when the market mood is positive.
Given the sheer scale of the $0.074 supply barrier, however, any buying reaction could be of a significant degree. This is why the analyst has called it “one of the most important support zones” for Dogecoin.
In some other news, DOGE has recently appeared to be following a Descending Triangle pattern, as Martinez has highlighted in another X post. The “Descending Triangle” forms whenever an asset observes consolidation between two converging trendlines, with a chief feature being that the lower of these lines is parallel to the time-axis.
As is visible in the below chart, Dogecoin has been moving down this pattern on the 4-hour timeframe.
Earlier this month, the coin retested the resistance level of the channel, but it ended up finding rejection. Currently, DOGE is trading about midway between the upper and lower levels, so it’s uncertain which level it might end up visiting next.
In the scenario that an escape from the triangle occurs during the next retest, it’s possible that Dogecoin could see a sustained move in the direction of the breakout. Based on the height of the Descending Triangle, Martinez has noted that a 29% move could be on the horizon for the asset.
DOGE Price
At the time of writing, Dogecoin is floating around $0.095, down over 7% in the last seven days.
