Dogecoin suffers sharp pullback as market saw sudden deluge of selling

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

• The market structure was bearish and momentum was neutral at press time.
• Buying pressure suggested a short-term recovery was possible but sentiment favored the sellers.

Bitcoin took a U-turn just beneath the $30k round number resistance on 26 April and nosedived 6.88% within an hour following this rejection. The lower timeframe sentiment had been bullish behind many altcoins such as Dogecoin before the drop.

Read Dogecoin’s [DOGE] Price Prediction 2023-24

The meme coin had been stuck beneath the $0.08 resistance over the past week, but a breakout encouraged the bulls. Coinglass data showed DOGE bulls suffered during the recent slump.

Liquidity in both directions has been hunted, making trading conditions precarious

Source: DOGE/USDT on TradingView

In recent hours, DOGE pushed above the recent lower high at $0.081 to reach $0.0835, before immediately crashing to reach $0.0748. Both bulls and bears were hurt by these developments, and DOGE’s bounce to the $0.08 resistance once again meant traders can exercise caution.

The bullish argument was based on the steady rise in the OBV over the past three days. This showed buying volume outweighed the sellers, and another move upward was likely after the recent flush.

On the flip side of this argument was the momentum and the market structure of DOGE. The fall beneath $0.0775 meant the structure was bearish, and the RSI was at 48 to show that an uptrend was not yet in motion.

Realistic or not, here’s DOGE’s market cap in BTC terms

Bitcoin could lead the way for the altcoin market. BTC has flipped 27.7k to support, with the recent plummet being a retest of said support. Hence, aggressive bulls can look to ride a Dogecoin breakout past $0.081, provided BTC ventures above $29k again.

Market sentiment leaned bearishly after the sudden plunge in prices

Source: Coinalyze

The funding rate almost slumped into negative territory after the intense selling pressure late on Wednesday (26 April). Since then, the funding rate recovered. However, the market sentiment continued to favor the bears.

The Open Interest was rising slowly over the past two days but saw a severe drop in recent hours. This discouraged bulls and, combined with the market structure, suggested that the lower timeframe outlook was bearish for DOGE.