Dogecoin [DOGE] Holds Above $0.20 Support as Risk-On Sentiment Reaches Fever Pitch

Even as the broader market sheds risk, Dogecoin [DOGE] is stubbornly holding above the crucial $0.20 support level.

Dogecoin [DOGE] has been surprisingly resilient, holding crucial support even as the broader market continues to shed risk.

This resilience could be a sign that buyers are stepping in strong, potentially setting up a solid floor for the memecoin.

With risk-on sentiment likely to return, could DOGE be setting itself up for a potential retest of $0.30 resistance?

Why $0.20 is a make-or-break level for Dogecoin

Taking a look at the daily chart, we can see some classic setups at play.

Whenever Dogecoin consolidates in a tight two-week range, it usually tends to be setting up for a big move. Before the breakout on the 8th of May, DOGE was calmly hanging between $0.15 and $0.17.

Then, as Bitcoin [BTC] hit new all-time highs, capital quickly flowed back in, sending DOGE on a nearly 50% sprint to $0.25 in just three days. In fact, the RSI reached a major peak here – the first time since November. As such, some profit-taking was to be expected.

[Chart: TradingView (DOGE/USDT)]

However, Dogecoin has shown impressive resilience, trading in a tight $0.20 to $0.25 range despite the ongoing market liquidation.

For a memecoin to hold this kind of price floor is unusual, especially during a bear cycle. Usually, memecoins get battered and their prices collapse rapidly. But Dogecoin has shown surprising strength, which could be a sign that smart money is accumulating in the background.

If we look at the last time Dogecoin broke out, we can see that it quickly recovered after the March crash and began a measured move. After reaching the $0.15 to $0.17 range, it consolidated for two weeks before breaking out in May.

If history repeats itself, it seems like traders are setting up for another rally like this.

Once the macro FUD subsides and Bitcoin clears its overhead resistance, Dogecoin could be in a good position to break above $0.25, with $0.30 likely to be the next resistance level.

FOMO alert: Why traders can’t ignore DOGE now

To add to AMBCrypto’s previous analysis, the largest Dogecoin whale is known to hold between 100 million and 1 billion coins.

As highlighted by Santiment, the whale’s balance just hit a one-month high of 26.44 billion DOGE. In less than a week, they added 640 million more coins to their holdings.

[Chart: Santiment]

This move wasn’t exactly subtle. It coincided perfectly with the $0.21 dip and also flipped the Short-Term Holder (STH) NUPL into ‘hope’ territory. In fact, it was the first time in almost four months that we saw this kind of positive trend.

For those unfamiliar, the STH NUPL (Net Unrealized Profit Loss) is an indicator that tracks the average price at which short-term holders acquired their Dogecoin holdings. When the STH NUPL is above zero, it indicates that, on average, STHs – those holding for less than 155 days – are in profit. Conversely, when it falls below zero, it signifies that, on average, STHs are in the red.

This shift in STH NUPL could be crucial as it indicates a change in the market mood. It seems that STHs are finally seeing green, which might spark more FOMO-driven buying.

Combine this new capital injection with the impressive resilience of Dogecoin holders throughout the recent market downturn, and the setup for a potential breakout begins to emerge.

For a memecoin to hold its ground despite market-wide liquidation? That’s no small feat. If the macro pressure lessens and Bitcoin manages to clear its overhead resistance, we could be setting up for Dogecoin to breakout, with $0.30 being a possibility.