Dogecoin price analysis: Will the $0.20 support level hold against selling pressure?

Dogecoin, the largest and most popular meme cryptocurrency, is currently facing significant pressure after the overall cryptocurrency market sharply declined. When Bitcoin dropped below $88,000, Dogecoin also followed suit, losing about 17% of its value in the past week. Despite this downturn, Dogecoin still dominates 50% of the meme cryptocurrency market, with a value of approximately $58.20 billion and its own market capitalization of $31.27 billion. The current price is $0.2110, Dogecoin has slightly increased by 4.68% in the past 24 hours. However, the question everyone is concerned about is whether the support level of $0.20 will hold or whether there is a possibility of further decline. Downtrend: The $0.20 support is under threat When considering the price movement of Dogecoin more closely, we see the presence of a significant resistance trend line on the 4-hour price chart. This resistance level has been a persistent barrier since the peak fluctuated at $0.41, witnessing numerous rejections of price declines. Therefore, Dogecoin has struggled to overcome these levels, with the price continuously dropping below key support areas. From its peak of $0.41, Dogecoin has dropped more than 50%, signaling a strong pessimistic sentiment continuing to dominate the market. This negative trend is reinforced by the positions of the 50, 100, and 200-day Exponential Moving Averages (EMAs), all sloping downwards, indicating the downward momentum is likely to continue unless a significant reversal occurs. Short-term recovery or continued decline? Dogecoin's recent price action has dropped slightly to $0.1953, but the cryptocurrency has since recovered slightly. This short-term recovery has pushed the price back above the important support level of $0.20, indicating the possibility of retesting the resistance-turned-support area at $0.23. If Dogecoin can successfully reclaim and hold above this level, there may be further price recovery opportunities. The relative strength index (RSI) on the 4-hour chart has also bounced back from oversold territory, indicating the possibility of a short-term recovery. However, the overall trend is still bearish, and it is crucial to monitor any signs of further weakness that could push Dogecoin below $0.20 towards lower support levels. Deteriorating sentiment: Is Dogecoin in denial? While some long-term Dogecoin holders remain optimistic despite the current market downturn, cryptocurrency analysts like Ali Martinez have pointed out an increasing shift in market sentiment. According to Martinez, the Unrealized Profits and Losses (NUPL) ratio has entered a phase of "belief/denial," indicating that many holders are still hopeful for market recovery, despite clear signs of price decline. This change in sentiment could signal the start of a longer-term correction, potentially leading to a period of anxiety if the market continues to decline. In such a scenario, Dogecoin may face prolonged challenges and the possibility of a deeper correction could increase. Network activity decrease: A signal of price decrease? In addition to broader market conditions, Dogecoin's network activity has shown worrisome signs of decline. Network addresses have plummeted by 95%, from 2.66 million to only 130,282. This significant drop in network activity indicates a diminishing interest in Dogecoin, which could further exacerbate the downward price trend. Because network activity is often correlated with price volatility, the continuous decline in activity is a worrying indicator for the short-term prospects of Dogecoin. Important price level to watch In the short term, Dogecoin may continue to challenge the resistance trendline above. If the price can surpass and hold above $0.23, it could target a recovery towards the 200-day EMA at $0.2720. Successfully breaking this resistance level could set the stage for a more significant price increase. On the other hand, if the price does not hold above $0.20 and drops lower, the next important support levels to watch are $0.1650 and the psychological support level of $0.15. These levels represent significant areas of interest for potential buyers looking to enter and stabilize the price. Conclusion: Can Dogecoin maintain the price of 0.20 dollars? Dogecoin's short-term price action suggests a possible retest of the $0.23 resistance level, but the overall downtrend remains intact. Further downside risks are high, especially considering the deterioration in network activity and the shift in market sentiment. If Dogecoin fails to hold above the critical support level of $0.20, it can fall further to $0.1650 and $0.15. Currently, investors and traders will closely monitor these important levels to assess whether Dogecoin can recover or continue to face downward pressure in the coming days. As is customary in the volatile world of cryptocurrencies, market sentiment and external factors will play a crucial role in determining Dogecoin's next major move.