Critical Dogecoin Warning: 3 Key Support Levels Point to Sharp 60% Drop

Dogecoin ($DOGE) is at a pivotal moment as on-chain data reveals thinning support below the $0.16 price level, according to a recent analysis by crypto analyst Ali (@ali_charts). The UTXO Realized Price Distribution (URPD) chart, sourced from Glassnode, highlights a significant supply cluster around $0.073245, representing 28.26 billion DOGE (18.63% of total supply), with a secondary cluster at $0.162615 (3.86 billion DOGE, 2.54%). This distribution suggests that if $0.16 fails to hold as support, the next major demand zone lies near $0.07, a level that could attract significant buying interest based on historical price action.

Technical Breakdown: Why $0.16 Matters

The URPD, an advanced on-chain metric, tracks the price at which DOGE last moved, offering a window into where holders might defend their positions. The current thinning of support below $0.16 indicates a potential supply vacuum, increasing the risk of a sharp decline if selling pressure mounts.

However, the $0.16 level remains a critical fortress, aligning with Fibonacci retracement levels and short-term moving averages like the SMA20, which hovers around $0.17. A breach below this could trigger a cascade toward $0.07, echoing the 2021 dip-buy bonanza that fueled DOGE’s meme-driven rallies.

Community Sentiment and the Road Ahead

On the flip side, bullish sentiment persists among some traders, with technical patterns like a potential cup-and-handle formation suggesting an imminent breakout above $0.18, targeting $0.25. Yet, with RSI(14) nearing oversold territory at 35, a rebound remains plausible if buying volume surges.

Investors should monitor on-chain flows and order book depth closely, as the outcome hinges on whether $0.16 holds or crumbles. For now, the market teeters on a knife-edge, with $0.07 looming as a make-or-break zone for Dogecoin’s near-term trajectory.