Dogecoin [DOGE], has experienced a persistent downtrend over the past five weeks. The asset has now given back nearly all the gains it made during its explosive 58% rally in mid-May. On 20 June, DOGE dipped below its May low, adding to growing concerns among long-term holders. However, a closer look at the on-chain data and historical performance suggests that not all hope is lost just yet. While the short-term picture remains bearish, the $0.21 resistance zone could serve as a critical level for a potential trend reversal.

According to a recent analysis by AMBCrypto, Dogecoin’s movements in April and May might have only been the beginning. The accumulation indicators and previous market behavior hint at the possibility of another leg up, provided DOGE can reclaim and sustain key resistance zones. One of the most important levels to watch is the $0.21 mark, which now serves as a critical resistance barrier. Until this area is flipped into support, long-term bullish conviction may remain on hold.

On the on-chain side, there are a few positive developments worth noting. Exchange netflows have been negative over the past two weeks, which typically signals that more DOGE is being withdrawn from exchanges than deposited. This often indicates accumulation by market participants rather than panic selling. While this doesn’t guarantee a near-term rally, it does show that some investors still see value in holding DOGE at current price levels.

Looking deeper into the data, the Coin Days Destroyed (CDD) metric showed notable spikes on 14 June and again on 17 June. This measure evaluates the movement of older coins, with higher values suggesting that long-term holders are beginning to move their assets—often a sign of selling pressure. However, while these spikes may have raised red flags, they are not yet part of a sustained trend. Unlike the prolonged CDD increases seen during major distribution periods like June-July 2023 or November-December 2024, the recent upticks appear to be isolated events rather than the start of a larger selloff.

The Cost Basis Distribution (CBD) heatmap provides additional insight into key price levels to watch. The heatmap, which tracks supply concentration across different price bands, shows strong historical activity around the $0.182 to $0.211 range. This zone, marked by three distinct supply bands, failed to act as support during the recent decline. If DOGE begins to recover, this area could serve as a tough hurdle as many holders may opt to sell at breakeven after suffering through the latest pullback. This sell-side pressure could stall recovery attempts and prolong the current downtrend.

That said, historical patterns offer a silver lining. Back in August and September 2024, Dogecoin similarly broke below major support levels, only to recover strongly a couple of months later. The setup today shares some of those characteristics, including heavy selling followed by early signs of re-accumulation. Moreover, the recent negative netflows from exchanges hint that investors may be preparing for another upward cycle.

If DOGE can muster enough momentum to retake the $0.21 level and flip it into a support zone, the long-term bullish thesis could regain credibility. Breaking through this resistance would not only restore confidence but also invalidate the current bearish structure. Until then, however, the $0.21 mark will remain a psychological and technical wall that traders will closely monitor.

In conclusion, while Dogecoin’s price action remains under pressure, the broader picture is more nuanced. On-chain indicators suggest cautious accumulation and potential for recovery, although key resistance zones must be cleared to initiate a true trend reversal. Traders and investors should keep an eye on the $0.21 level, which could determine whether DOGE enters a new bullish phase or continues its correction in the coming weeks.