Assessing if Dogecoin can hold $0.215 after a 13% weekly drop

• Dogecoin exhibited a bearish market structure.
• The on-chain metrics showed a buy signal for the memecoin.

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.

Since the 17th of February, the token has already shed 13%. This downward trajectory would likely take DOGE to a key support level at $0.215.

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

Will the Dogecoin present a buying opportunity?

Source: DOGE/USDT on TradingView

The daily chart of DOGE initially showed a bearish market structure. This shifted at the end of January when the price moved below the swing low at $0.305 and failed to defend the 50% retracement level.

At the time of writing, Dogecoin was approaching the 78.6% retracement level at $0.215. During the rally in March 2024, the $0.2 and $0.215 levels acted as strong resistance. Now, their retest as support is a positive sign for bulls.

However, any weakness in Bitcoin [BTC] could still negatively impact the altcoin market.

Source: Santiment

Data from Santiment indicated that recent losses presented a good buying opportunity for the medium term. The Mean Coin Age (MCA) and MVRV ratios over the past three months were examined, showing a steady uptrend in MCA.

Meanwhile, the MVRV ratio was at -31%, its lowest point in the last three months. This demonstrated that Dogecoin holders experienced significant losses on average over the past three months.

The rising MCA suggested accumulation. Despite the price downtrend, the lack of DOGE transactions in the past three months explained the MCA trend and was a sign of bullish conviction.

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

Source: Santiment

Supply distribution data indicated accumulation among all cohorts of holders, except for those owning more than 100 million Dogecoins.

The 100k-10M DOGE cohort has steadily increased 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. However, the growth in holder numbers in February suggests increased demand and could support Dogecoin’s recovery.