As a seasoned analyst with over a decade of experience in the cryptocurrency market, I have seen my fair share of ups and downs, bull runs, and bear markets. The recent Dogecoin (DOGE) price correction has been no exception, and it appears we are back to where we were on Friday, amid increasing chances of an extended correction.
Due to Dogecoin (DOGE) price decrease from its peak last week, there was an increase in the closure of long positions, leading to a loss of $1.48 million for traders. On the other hand, short position liquidations were minimal at only $55,850. This downward trend suggests that Dogecoin has returned to its price level from last Friday, and there is an increased possibility of a prolonged correction.
Dogecoin Price Market Movers: 33.4B IOMAP Resistance, Derivatives Open Interest Drop, Whale Accumulation
On Tuesday, Dogecoin’s price dropped by approximately 4.1%, settling at around $0.1044. Over the last week, it has seen a total drop of 0.7%. Similar to Bitcoin and other cryptocurrencies, the value of Dogecoin found it challenging to sustain its gains from the previous week as trading activity slowed down.
The difficulties faced by the meme coin could be due to its weak underlying foundation, as evident from IntoTheBlock’s IOMAP model showing a dense zone of sellers between $0.1101 and $0.1134. This area, where approximately 31,080 addresses have purchased around 33.4 billion DOGE, might hinder the upward trend, causing Dogecoin to either maintain consolidation above the $0.1 support level or slide down to $0.08 in pursuit of more liquidity. For a rally to materialize, bulls need to overcome potential selling pressure.
Over the coming days, things might get tougher for Dogecoin if the number of open contracts (Open Interest) continues to decrease. As per Coinglass’s data, a 4% fall in Open Interest to $500 million, along with an increase in trading volume to $804 million, indicates that traders are liquidating their positions. This could mean a change in investor sentiment or uncertainty regarding Dogecoin’s price trend.
Despite market turbulence this week, it appears whales remain undeterred in amassing DOGE. Santiment’s supply distribution analysis shows that holders with 1 million to 10 million tokens now make up 7.31% of the total supply, while those with 10 million to 100 million have boosted their holdings to 12.85%. This suggests that investors are optimistic about Dogecoin’s future and are increasing their investment in it.
DOGE Price Analysis: Wedge Breakout Elusive
Currently, the price of Dogecoin is hovering beneath its 20-day Exponential Moving Average (EMA) because it couldn’t surpass the resistance level set by the 50-day EMA at approximately $0.1127. At this point, sellers are dominating the market, prompted by a pullback in the Relative Strength Index (RSI), which now stands around 45 within the neutral zone. If the RSI falls further into the oversold territory, Dogecoin could plummet towards its short-term support at $0.1, potentially pushing it to search for liquidity around $0.1.
The forecast for Dogecoin indicates that if it maintains its current support at approximately $0.1, a significant change in direction – likely an upward trend – is very probable. Additionally, the daily range shows a potential falling wedge pattern, which could lead to a 71.5% increase to around $0.18 if confirmed. A falling wedge is typically a sign of a bullish reversal and is verified when the resistance trend line is broken. Traders might choose to buy at levels above this breakout point and set their stop losses below the trend line. A surge in trading volume would further strengthen the belief in Dogecoin’s price increase.
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2024-08-27 18:56