Dogecoin (DOGE) Presents a Buying Opportunity as the Token Approaches a Key Support Level

Dogecoin [DOGE] has been trending downward since December. The leading memecoin has been unable to assert bullish momentum since failing to flip the $0.36-$0.38 zone to support a month ago.

Dogecoin (CRYPTO: DOGE) has been on a downward trend since December. The leading memecoin failed to gain bullish momentum after it was unable to flip the $0.36-$0.38 zone to resistance a month ago.

Since Feb. 17, the token has already shed 13%. This downtrend will likely take DOGE to a key support level at $0.215.

Will the bulls be able to defend this level and initiate a comeback?

Is Dogecoin presenting a buying opportunity?

DOGE’s daily chart initially showed a bearish market structure, which shifted in late January when the price moved below the swing low at $0.305 and failed to hold the 50% Fib level.

At press time, Dogecoin was nearing the 78.6% Fib level at $0.215. During the March 2024 rally, the levels of $0.2 and $0.215 acted as strong resistance, and their retest as support bodes well for the bulls.

Any weakness in Bitcoin could still negatively impact the altcoin market.

Santiment's data showed that the recent losses presented a good medium-term buying opportunity. The Mean Coin Age (MCA) and MVRV ratios over the past three months were examined, showing a steady uptrend in MCA.

At the same time, the MVRV ratio was -31%, its lowest level in the last three months, indicating that on average, Dogecoin holders faced significant losses over the past three months.

The rising MCA suggested accumulation, and despite the downtrend in DOGE’s price, the lack of transactions involving DOGE in the past three months explained the MCA trend and signaled bullish conviction.

Together, these factors provided a buy signal for the token.

Santiment's supply distribution data showed that all cohorts of holders were accumulating, except for those holding over 100 million Dogecoins.

The 100k-10M DOGE cohort has been steadily increasing in numbers over the past month, although not as rapidly as the smaller accounts.

The annual issuance of five billion DOGE makes the memecoin slightly inflationary, but the growth in holders in February signaled increasing demand and could help Dogecoin’s recovery.