Dogecoin's price action shows weakening bullish momentum as it consolidates below the crucial $0.18 resistance level.
Network data reveals the highest profit-taking activity in DOGE since early May,Ethereum Reddit suggesting holders are capitalizing on recent gains.
Increased movement from dormant wallets historically precedes price corrections in the meme cryptocurrency.
The Dogecoin market shows concerning signals as the digital asset fails to maintain momentum above key technical levels. Current trading patterns indicate growing caution among market participants, with several on-chain metrics flashing warning signs for the popular meme coin.
Profit-Taking Activity Reaches Critical Levels
Network Realized Profit/Loss data from Santiment reveals a significant spike in profit-taking behavior among DOGE holders. This metric, which tracks the average profit/loss of coins moved on-chain, shows the most substantial profit realization event in over six weeks.
Historical patterns suggest that such spikes in profit-taking often coincide with local price tops, as market participants begin distributing their holdings to lock in gains. The current activity level indicates growing selling pressure that could potentially drive prices lower in the near term.
Dormant Tokens Awaken
Additional concerns emerge from Santiment's Age Consumed metric, which tracks the movement of previously inactive coins. The recent surge in this indicator suggests long-term holders are beginning to move their DOGE, potentially to exchange platforms for liquidation.
Market analysts note that similar patterns have preceded previous corrections in Dogecoin's price history. The reactivation of dormant wallets often signals changing sentiment among long-term investors, who may be looking to reduce exposure after the recent price appreciation.
Technical Outlook Remains Cautious
From a chart perspective, Dogecoin faces multiple technical hurdles. The rejection from the 50-day EMA at $0.195 established a near-term resistance level, while the breakdown below $0.181 support suggests weakening buying interest.
Momentum indicators currently favor the bears, with the RSI remaining below neutral territory and the MACD showing a bearish crossover. These technical signals align with the on-chain data to paint a cautious picture for DOGE's near-term prospects.
Should current support levels fail to hold, market watchers anticipate a potential retest of April's lows near $0.157. However, a decisive break above the $0.181 resistance could shift the narrative and open the door for a retest of higher levels.
