Dogecoin Holders Remain Resilient Amid Downturn, Awaiting Potential Recovery

Dogecoin (DOGE) has gone through a 10% drop in value over the past month and reached a new 2023 low on Monday . Despite this long-term DOGE investors have demonstrated resistance and have been determined to avoid significant losses . Will their steadfastness be enough to initiate a potential Dogecoin recovery?

Long-Term Holders Show Confidence in DOGE Amid Price Dip

Just like many memecoins, Dogecoin entered a downtrend on Monday following the SEC lawsuit against major exchanges Binance and Coinbase . However on Wednesday DOGE witnessed a slight 2% rally which was driven by the conviction of long-term investors who were hesitant to sustain further losses . This suggests that a core group of investors are holding on to their DOGE positions and potentially laying the foundation for a rebound in the near future .

Data seized from IntoTheBlock reveals a notable increase in the number of diamond hand addresses that refer to long-term holders who keep their coins for a year or more . Between May 2nd and June 7th the number of long-term Dogecoin holders rose by 50,000 addresses while short-term trader addresses decreased by 224,000 . This data suggests that the recent sell-off was largely driven by short-term traders exiting their positions .

Strategic Investors Eyeing the Dip, Order Books Indicate Potential Upside

In further support of a bullish outlook order books on exchanges indicate that investors are capitalizing on the price dip around the $0 .060 mark . On-chain market depth charts reveal a total of 272 million DOGE in purchase orders placed by strategic investors while sellers have listed only 217 million DOGE for sale . This supply shortage of 55 million DOGE could add to a price recovery as buyers compete for the limited available supply .

SPotential Recovery Scenario: DOGE Could Rally to $0 .075 if Resistance Breaks

There are indications of a potential recovery for Dogecoin . Bullish traders may drive a DOGE recovery to $0 .075 . However a significant 20 .38 million DOGE sell wall created by bearish traders could pose resistance as the price approaches a 5% increase to $0 .071 .

If this resistance is successfully broken DOGE could possibly rise further to $0 .075 . If DOGE dips below $0 .065 again it may reach a new 2023 low of $0 .060 . However strategic investors have set up buying orders for 33 .2 million DOGE at a 5% price drop to $0 .064 likely preventing further decline .

While the recovery scenario is dependent on various factors that include investor sentiment and market dynamics the resilience of long-term holders and the supply shortage contribute to the potential for a Dogecoin recovery in the foreseeable future .

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