A cryptocurrency analyst has revealed where the most significant Dogecoin support level is located, according to on-chain cost basis data.
Dogecoin CBD Points To $0.08 As Strongest Support
In a new post on X, analyst Ali Martinez has talked about how Dogecoin support is looking from the perspective of the Cost Basis Distribution (CBD). The CBD is an indicator created by on-chain analytics firm Glassnode that tells us about the amount of DOGE supply that was last purchased or transacted at the various price levels that the coin has visited in its history.
Generally, investors are sensitive to retests of their cost basis and can be prone to showing some kind of reaction during one. The more holders that have their cost basis at the same level, the larger the market reaction upon a retest. Thus, the levels that the CBD identifies as being dense with supply could potentially be significant ones for the cryptocurrency.
Now, here is the chart shared by Martinez that shows the trend in the Dogecoin CBD over the past couple of years:
As displayed in the above graph, a major Dogecoin cost basis level is located around $0.20, hosting the break-even level of 12.1 billion DOGE. The latest bearish momentum, however, has meant that the memecoin has plunged under this mark, putting all these investors into a state of loss.
Underwater holders may look forward to a retest of their cost basis so that they can exit with their entire investment back. This can make large supply zones above the asset’s price potential resistance barriers. Considering that the $0.20 level is so huge, it’s possible that DOGE may find notable impedance at it, should a retest take place in the near future.
In the scenario that Dogecoin continues to decline, it might have to find support at a major cost basis center below. Such investors who were in profit prior to the retest may decide to buy more at their break-even level, thinking it to be a profitable entry point to accumulate more.
From the chart, it’s visible that at the levels below, there aren’t any large cost basis zones until all the way down to $0.08, implying support may be thin for the asset.
The $0.08 level, though, is extraordinary in the amount of supply that it hosts the acquisition point of: 27.4 billion DOGE. The analyst has noted that this makes the line DOGE’s “most significant support level.”
It now remains to be seen how Dogecoin will develop in the near term and whether a retest of one of the big cost basis centers will take place.
DOGE Price
At the time of writing, Dogecoin is trading around $0.158, down 10% over the last week.
