Dogecoin's $0.20 Test: Can It Hold Amidst Market Meltdown?

Dogecoin's next move is closely tied to its ability to hold a crucial price level, as the cryptocurrency has recently broken below key support with no clear demand zone in sight. The $0.20 level has emerged as the third crucial floor for Dogecoin this year, and its ability to hold this level faces a serious test.

Meme-sector valuations have plunged by $15 billion in a week, with Dogecoin alone shedding $8 billion. The cryptocurrency's network is rapidly contracting, with new address creation collapsing by 97% since November. As HODLers unload and fresh inflows remain weak, the demand-supply imbalance is forcing Dogecoin into lower lows.

Unless network activity sees a meaningful rebound, Dogecoin's long-term trajectory remains bearish. The chances of reclaiming its $0.48 post-election peak appear distant, while the highly anticipated $1 target remains highly elusive. The big question is whether Dogecoin will be able to flip $0.20 into support.

Amid the broader market meltdown, Dogecoin has erased 18% of its weekly gains, liquidating $7.64 million in long positions over the past 24 hours. Network data reveals that Dogecoin holdings in 1M-10M token wallets have plunged to a six-month low, shedding over 460 million coins. Meanwhile, a major whale wallet in the 100M-1B range has offloaded a staggering 6 billion Dogecoin since the post-election rally, amplifying the selling pressure.

In the near term, a rebound to $0.25 - its previous resistance - remains uncertain amid weak accumulation and unfavorable macro conditions. Should external headwinds worsen and Bitcoin drop below its $84K support, Dogecoin could face significant challenges in defending its $0.20 price floor.