Dogecoin Recovers 4.84% as Bulls Defend Key Demand Zone

Dogecoin (DOGE) is currently trading at $0.154, marking a 4.84% gain from its recent low of $0.142. This recovery is significant as it has seen bulls successfully defend a key demand zone that has held since November 2024. This demand zone, between $0.142 and $0.160, has historically sparked buying activity and has been crucial for previous recoveries.

Historically, this demand zone has been a pivotal point for Dogecoin. In March, after the Q4 2024 rally cooled, DOGE price bottomed at this zone and recovered by 40% within weeks. Similarly, in April, Dogecoin defended this support, leading to a rally from $0.14 to $0.25 within weeks. If this trend continues, Dogecoin could potentially recover and aim for the 61.8% Fibonacci level of $0.21. If the broader market sentiment improves, DOGE could extend its upswing towards $0.34.

The 30-day Market Value to Realized Value (MVRV) ratio for Dogecoin signals that a bottom could be in, as most recent buyers hold unrealized losses. This metric has declined to -15.43%, indicating that traders who purchased DOGE in the last 30 days are sitting on significant losses. A negative MVRV ratio suggests that a majority of DOGE holders are now sitting on losses, and they could become less willing to sell until they break even. This, combined with the seller exhaustion depicted by the Relative Strength Index (RSI), supports the thesis for a bullish Dogecoin price forecast.

However, if the market sentiment remains in fear, traders should anticipate a drop to $0.13. A recent analysis reported that a symmetrical triangle warns that DOGE price could make a 60% breakout to the downside if support at $0.16 fails to hold. Despite this potential downside risk, the technical analysis and historical data suggest that Dogecoin price is likely to recover soon as bulls defend the demand zone sitting between $0.142 and $0.160. The MVRV also supports this bullish outlook by showing that a majority of recent buyers are sitting on significant losses. If traders become less willing to sell at a loss, it could pave the way for a recovery in the near term.