- Dogecoin is struggling to renew the uptrend after the USD 0.088 correction.
- The IOMAP model and network growth models suggest that recovery will not be a walk in the park.
- DOGE will ditch the potential breakdown to $ 0.35 if the day ends above 50 SMA.
Dogecoin is down in a descending parallel channel after being rejected from the record high of $ 0.088. It appears that the impact caused by Elon Musk has subsided and allowed Doge to seek consolidation. Meanwhile, in a broadly downward market, the Meme Coin is rocking at $ 0.053.
Dogecoin is striving to regain critical levels of support
After correcting from the all-time high, Dogecoin has failed to reverse the trend. Several levels of support were shaken including $ 0.07, $ 0.06, the 50 Simple Moving Average (SMA), and the 100 SMA on the 4-hour chart.
It should also be noted that the break below the central boundary of the canal opened the door to further losses. It is currently the job of cops to defend the lower edge of the canal. Otherwise, DOGE falls freely to the 200 SMA, which is currently at $ 0.035.
The Moving Average Convergence Divergence (MACD) confirms the bearish outlook as it approaches the midline. In the meantime, consolidation is likely to have priority as the MACD line (blue) and signal line lacks a clear sense of direction.
DOGE / USD 4 hour chart
A comprehensive look at the IOMAP model developed by IntoTheBlock (ITB) reveals increasing overhead pressures that will likely delay Dogecoin recovery. The IOMAP indicates important buy and sell positions that can be used as expected support or resistance.
In the $ 0.054 to $ 0.056 region, there are nearly 57,000 addresses who previously bought 8.5 billion DOGE. Other mid-strength seller concentration zones can be seen towards $ 0.06, which means reaching a new all-time high will be an uphill battle.
Dogecoin IOMAP Chart
On the other hand, Dogecoin isn’t heavily supported. However, the IOMAP draws traders’ attention to the $ 0.048-0.05 area. Around 12,800 addresses had previously bought around 4.5 billion DOGE here.
ITB’s Daily New Addresses model reinforces the bearish outlook due to the steady decline in the number of new addresses joining the network. Dogecoin unique addresses were close to 134,000 as of Jan 29, but that number has dropped to around 37,000 addresses a day.
In other words, the network is not getting the attention it received in late January. Token inflows and outflows were also negatively impacted. As a result, recovery will be difficult or DOGE may continue to depreciate.
Dogecoin new address table
Look at the other side of the fence
Note that holding above $ 0.05 and supporting the lower bound of the descending channel may avert the potential free fall to $ 0.035. At the same time, reclaiming support at the 100 SMA and possibly the mid-range line will pave the way for gains above $ 0.06 as Dogecoin will take another path to new all-time highs.