Dogecoin (DOGE) price is down 10% from a month ago. After the price slipped to a new 2023 bottom on Monday, DOGE long-term investors held firm as they looked to avoid booking historic losses. Will this be enough to trigger an early Dogecoin price rebound?
Dogecoin (DOGE) price, like most memecoins, entered a downtrend on Monday as investors reacted to the SEC lawsuit against Binance and Coinbase.
On Wednesday, however, DOGE scored a mild recovery of 2% as long-term investors grew reluctant to book further losses. With strategic investors queuing up to scoop the dip, what is the chance that DOGE will rebound early in the coming days?
Dogecoin Long-term Investors Are Regrouping
IntoTheBlock chart below shows how the number of “diamond hand” addresses holding DOGE has increased significantly over the past month.
“Diamond hands” or Long-term holding addresses refer to investors who have held their coins for 1-year or more years.
Between May 2 and June 7, the number of Dogecoin long-term holders increased by 50,000 addresses. Meanwhile, the short-term trader addresses were reduced by 224,000 addresses.
Evidently, the data presented above implies the recent sell-off that saw DOGE price drop below $0.065 this week was largely caused by short-term traders who exited their positions.
If the long-term investors continue to hold firm, DOGE will likely defend the $0.060 support level and potentially trigger an early price rebound in the coming days.
Strategic Investors Are Looking to Buy the Dip
In further confirmation of the bullish outlook, the order books of exchanges suggest that investors are looking to scoop the dip around the $0.060
The Exchange on-chain Market depth chart shows an aggregate of the total buy/sell orders placed by Dogecoin holders across different crypto exchanges.
Currently, strategic DOGE investors have placed orders to purchase 272 million coins. Meanwhile, sellers have placed only 217 million DOGE up for sale.
When demand exceeds the supply available on exchanges, competition increases and ultimately causes the price to trend upward. As things stand, there is a supply shortage of 55 million DOGE. This means the price is likely to rebound early as buyers begin to compete.
In conclusion, long-term holders’ supply shortage and confidence are two critical factors that could trigger an early Dogecoin price rebound.
DOGE Price Prediction: Early Rebound to $0.075
According to IntoTheBlock’s In/Out of the Money Price distribution data, the bulls will likely force a DOGE price rebound to $0.075. However, given that bearish traders have mounted a sell-wall of 20.38 million DOGE, the rally could face major resistance once the price rises 5% toward $0.71.
But if that resistance caves as expected, then DOGE price will likely push further toward $0.075.
Still, the bears can negate this optimistic narrative if the DOGE price drops below $0.065 again. But strategic investors have placed orders to purchase 33.2 million DOGE once the price drops 5% toward $0.064.
This buy wall will likely prevent the price from dropping any further.
Although unlikely, if that resistance level fails to hold, the DOGE will likely drop to a new 2023 bottom of $0.060.
Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.