Dogecoin price is set for a downturn as it encounters its resistance barrier
|- Dogecoin price is testing the resistance around the 100-day EMA at $0.1073, with an impending decline ahead.
- On-chain data shows DOGE's daily active addresses decreasing and dormant wallets moving again, signaling a bearish move.
- A weekly candlestick close above $0.1073 would invalidate the bearish thesis.
Dogecoin (DOGE) price rose slightly during Asian trading hours on Friday, approaching the critical resistance zone around $0.1073. On-chain data shows DOGE's daily active addresses decreasing and dormant wallets moving again, signaling a bearish outlook for Dogecoin in the upcoming days.
Dogecoin price poised for rejection after retesting key resistance level
Dogecoin's price finds resistance around its 100-day Exponential Moving Average (EMA), which is around $0.1073. This level also aligns with the weekly resistance level of $0.1018. As of Friday, it trades slightly higher by 1% at $0.1010.
If the 100-day EMA at $0.1073 holds as resistance, DOGE could decline 24% to retest its next weekly support at $0.0782.
The Relative Strength Index (RSI) and the Awesome Oscillator (AO) on the weekly chart trade below their neutral levels of 50 and zero, respectively, suggesting an impending bearish trend.
DOGE/USDT weekly chart
Santiment's Daily Active Addresses index, which helps track network activity over time, aligns with the bearish outlook noted from a technical perspective. A rise in the metric signals greater blockchain usage, while declining addresses point to lower demand for the network.
In Doge's case, Daily Active Addresses have declined 10% this week and have been falling constantly since mid-March, indicating demand for DOGE's blockchain usage is decreasing.
DOGE Daily Active Addresses chart
Additionally, Santiment's Age Consumed index shows that spikes in this metric suggest dormant tokens (tokens stored in wallets for a long time) are in motion and can be used to spot short-term local tops or bottoms.
For DOGE, history shows that the spikes were followed by a decline in Dogecoin price. The most recent uptick on August 6 also forecasted that DOGE was ready for a downtrend.
DOGE Age Consumed chart
Even though on-chain metrics and technical analysis point to a bearish outlook, if the Dogecoin price produces a weekly candlestick close above $0.1073, the move would invalidate the bearish thesis. This development could see DOGE's price rally to revisit its weekly resistance at $0.1435.
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