The price of Dogecoin (DOGE) has dropped 10% from a month ago, reaching a new low point for 2023. Despite this, long-term investors are holding firm and resisting selling in order to avoid large losses. Is this enough to encourage an early rebound of Dogecoin’s price?

On Monday, like most memecoins, DOGE entered a downtrend as investors reacted to the SEC lawsuit against Binance and Coinbase. On Wednesday, however, DOGE saw a 2% increase as long-term investors were reluctant to sell and booked no further losses. With strategic investors looking to buy the dip, could there be an early rebound for DOGE’s price in the coming days?

Dogecoin Long-Term Holders Are Regrouping

The following IntoTheBlock chart shows that “diamond hand” addresses, referring to long-term investors who have held their coins for one or more years, have increased significantly over the past month, while short-term trader addresses have decreased.

From May 2 to June 7, the number of Dogecoin long-term holders increased by 50,000 addresses while short-term traders’ addresses reduced by 224,000 addresses. Based on this data, it appears that the recent sell-off leading DOGE’s price to drop below $0.065 was largely caused by short-term traders exiting their positions. But if long-term investors hold firm, DOGE will likely defend its $0.060 support level and potentially encourage an early price rebound in the coming days.

Strategic Investors Are Looking to Buy the Dip

The order books of exchanges suggest that investors are looking to buy the dip around the $0.060 level, further confirming the bullish outlook. The Exchange on-chain Market depth chart shows that strategic DOGE investors have placed orders to purchase 272 million coins while sellers have posted only 217 million DOGE for sale.

When demand exceeds the supply available on exchanges, competition increases and ultimately causes the price to trend upward. As things stand, there is a supply shortage of 55 million DOGE, which means that the price is likely to rebound early as buyers begin to compete.

Long-term holders’ supply shortage and confidence are two critical factors that could trigger an early Dogecoin price rebound.

DOGE Price Prediction: Early Rebound to $0.075

According to IntoTheBlock’s In/Out of the Money Price distribution data, the bulls will likely force a DOGE price rebound to $0.075. However, bearish traders have mounted a sell-wall of 20.38 million DOGE, so the rally could face significant resistance once the price rises 5% toward $0.71. But if this resistance is breached, then DOGE’s price will likely push further toward $0.075.

The bears can still negate this optimistic narrative if the DOGE price drops below $0.065 again. However, strategic investors have placed orders to purchase 33.2 million DOGE once the price drops 5% toward $0.064. This buy wall will likely prevent the price from dropping any further. But if that resistance level fails to hold, the DOGE will likely drop to a new 2023 bottom of $0.060.

While this outcome is unlikely, always conduct your own research and consult with a professional before making any financial decisions.