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The price of Dogecoin briefly reached $0.09 on January 12, marking a 13% increase since Elon Musk’s company X announced its plans to launch a peer-to-peer payment platform earlier in the week.
On January 9, X, which is known for its affiliation with Dogecoin, released a blog post titled “Transforming the Global Town Square,” outlining its roadmap for 2024. Alongside plans to integrate artificial intelligence into advertising, X also mentioned its intention to launch peer-to-peer payments functionality. This news sparked a positive reaction in the Dogecoin market.
The chart from TradingView shows that the price of Dogecoin has experienced a 13% increase in just a few days following the blog post. However, data from on-chain movements suggests that this rally may not be sustained for long.
It has been speculated that X’s plans to launch a peer-to-peer network could potentially leverage the Dogecoin network, given the previous affinity between Elon Musk, X, and Dogecoin. In fact, the Dogecoin logo was briefly added to X’s website in 2023.
However, the current on-chain data trends indicate a bearish sentiment among Dogecoin traders, despite the recent price increase. The aggregate exchange order books data from IntoTheBlock reveals that there are currently sell orders for 798 million Dogecoins, significantly outnumbering the buy orders for 752.4 million Dogecoins.
When the sell orders outweigh the buy orders by such a large margin, it suggests that market momentum is leaning towards bearishness. This abundance of supply compared to demand puts downward pressure on the price of Dogecoin, potentially leading to a correction.
If the bears manage to break through the initial support level around $0.07, it could trigger a major price correction. The Global In/Out of the Money (GIOM) data from IntoTheBlock shows that a significant number of current Dogecoin holders acquired their coins at an average price of $0.072. If the price falls below this level, it could cause panic among these holders and lead to even larger losses.
On the other hand, if the bullish traders manage to push the Dogecoin price above the $0.10 mark, it could invalidate the pessimistic forecast. However, they would still face resistance at the $0.095 level.
Overall, the current market dynamics suggest that a correction in the price of Dogecoin is imminent. It remains to be seen whether the support level will hold or if the price will continue to decline.
