As a seasoned analyst with over two decades of experience in the cryptocurrency market, I have seen countless trends and cycles come and go. While Dogecoin’s recent bullish momentum is undeniably impressive, I cannot help but feel a sense of caution when looking at its current position.
Over the past week, Dogecoin‘s price has shown a robust upward trend, even recovering from Monday’s crash. Yet, this bullish momentum could face obstacles due to an oversupply of coins in the market. However, these dips may also lead to increased liquidity, which could ultimately trigger a significant surge or breakout.
Dogecoin Price Analysis As Supply Threatens Uptrend
The price of Dogecoin currently hovers over the $0.1 support level, but encounters significant resistance at around $0.11. Data from IntoTheBlock suggests that the meme coin’s path to recovery may be complex. This is because about 17,300 investors bought a total of 32.6 billion Dogecoins between $0.1101 and $0.1119, which could pose challenges in the near future.
This group could provide additional supply to the market, which might slow down the rising trend since bulls are trying to reach their target of $0.2. Above the major red cycle (as indicated in the model), there’s a strong likelihood that resistance will decrease substantially, possibly leading to an increase in Dogecoin price due to reduced opposition.
When considering potential drawbacks, it’s important to note that Dogecoin may be vulnerable to significant drops because of insufficient strong support levels. The most substantial zone where buyers tend to accumulate is at approximately $0.1, with around 9.2 billion DOGE bought by roughly 25,640 addresses. Dropping below this price point might prompt a large-scale sell-off as Dogecoin looks for increased liquidity in the regions of $0.09 and $0.08.
As a crypto investor, I noticed that the futures market open interest has turned negative again after a bullish run following last week’s market crash. According to Coinglass data, the Open Interest (OI) for DOGE stands at $483 million, which represents a 0.85% decrease over the past 24 hours. This decline is also accompanied by a significant drop in trading volume, down by approximately 31.8%, leaving us with a daily volume of $991 million. It’s essential to remember that decreasing OI and volume may indicate an incoming bearish trend as traders tend to avoid opening new positions during such periods.
The price of Dogecoin might struggle to break through the $0.1 barrier due to the Super Trend indicator moving above it. Long-term traders should remain vigilant and be prepared to adjust their strategies if Dogecoin falls below its $0.1 support level. Moreover, an Institutional On-chain Movements (IOMAP) resistance at $0.1, combined with a 200-day Exponential Moving Average (EMA) at $0.1144, could potentially slow the coin’s progress towards $0.2.
As an analyst, I’m observing a potential bullish scenario for Dogecoin (DOGE). The support for the price is forming slightly above $0.1, which is where the paths of my 20-day Exponential Moving Average (EMA) and 50-day EMA converge. A robust four-hour candle is shaping up on the chart, and if it closes above this support, it could attract more traders to back the bullish theory for DOGE. For day traders, a strategic move might be to set targets at $0.11, waiting for a further confirmation of the uptrend before committing fully to DOGE.
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2024-08-13 22:26