As a seasoned researcher with years of experience analyzing cryptocurrency markets, I must admit that Dogecoin (DOGE) has been a rollercoaster ride. Today, I see a bearish trend emerging for DOGE, backed by both technical and on-chain indicators.
In simple terms, the cost of Dogecoin surpassed a bearish pattern called a falling wedge early Monday morning, suggesting a potential reversal in the downward trend. The past few hours have seen an uptick in Dogecoin’s price on the 4-hour chart, indicating temporary relief from the decline. However, it’s important to note that Dogecoin’s price hasn’t completely recovered yet. Futures data indicates a growing urge to sell the asset, with approximately $1.4 billion of Dogecoin at risk of falling further into losses.
Dogecoin Price Facing Rejection at Resistance
At the moment, the Doge price movement seems to be on a decline. This is suggested by the fact that it’s trading below the 200-day line (represented by the black line at $0.115) and is barely above the 50-day exponential moving average (EMA), which can be seen as the green line at $0.105. The recent price behavior hints at persistent bearish trends continuing.
For Dogecoin’s price, the closest potential resistance level can be found around $0.105, which coincides with the 50-day Exponential Moving Average. A more substantial resistance lies at approximately $0.11518, where the 200-day Exponential Moving Average is located.
Immediate resistance is approximately at $0.093 (represented by the orange line), while a more robust support can be found within the $0.080 to $0.085 price range, which I’d mark as the grey area.
As an analyst, I’ve observed a significant breakdown in the rising wedge formation, indicating a potentially bearish trend ahead. The latest price actions seem to indicate mounting selling pressure as we approach the support levels.
In simpler terms, the Relative Strength Index (RSI), currently sitting at 50.34, suggests a neutral stance but hints slightly towards a downward trend since it’s moving down from overbought zones. Meanwhile, the Chaikin Money Flow (CMF) stands at -0.11, signifying a modest level of selling pressure that might intensify if Dogecoin’s price keeps falling.
During the process of creating the wedge shape, there was a steady flow of activity. However, there was a significant increase in this activity at the point of the wedge’s collapse. This surge indicates a potential bearish breakout, and the increased volume reinforces the downward trend that followed.
Based on current Dogecoin price predictions, a break above its 200-day Exponential Moving Average could potentially disrupt the downward trend suggested by the falling wedge pattern. If this occurs, Dogecoin’s new projected price might reach $0.14.
On-Chain and Futures Support Correction
As a researcher observing the Dogecoin market, I noticed a decrease of 1.95% in the open interest (OI) over the past 24 hours. This suggests that funds are flowing out of the DOGE market, potentially indicating a shift in investor sentiment. Simultaneously, the DOGE price dipped by 1%, trading at approximately $0.105 during this period.
Combining these two data points shows that DOGE traders who are Long on the asset are closing their positions.
Furthermore, the CVD (cumulative volume delta) over a 4-hour period, as provided by Coinalyze, reveals that the amount of coins sold exceeds the number bought in this timeframe, since the difference between buy and sell volumes is currently negative.
When both OI and CVD decrease, it indicates that traders are closing Long positions, signaling a bearish trend.
According to IntoTheBlock’s data, approximately $1.4 billion of Dogecoin could potentially decrease in value if the Dogecoin price falls below 0.09 US dollars.
Currently, 45.16% of all DOGE holders are in profit. If the price slides below this crucial support level, the percentage of profitable holders could drop by 19%.
As a researcher, I’m excited to share that recent data from Messari Research has indicated a surge in active addresses associated with Dogecoin. This uptick could potentially signal growing investor attention towards the Dogecoin blockchain.
Overall, the bearish Futures metrics outweigh the single on-chain metric from the Dogecoin blockchain. While active addresses suggest real users and activity on the network, the current selling pressure on DOGE may suppress the metric’s impact.
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2024-08-12 17:30