DOGE saw a strong bounce in the last 36 hours; here’s why a reversal is likely
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Dogecoin saw a lack of buying pressure in recent days
- The Fibonacci levels and the local resistance could be helpful for traders
Dogecoin [DOGE] had a technical bullish structure but the chart suggested that DOGE could trade within a short-term range in the coming days. Despite the short-term gains of the past two days, evidence suggested the bulls would likely be unable to sustain the pressure.
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A recent price report by AMBCrypto noted that the $0.06 resistance level forced a rejection last weekend. The inference that the market had not turned bullish came to fruition just a day later, when Monday’s volatility saw DOGE climb to $0.0613 quickly before receding just as fast.
The Fibonacci levels and local resistances together signaled where sentiment could begin to shift
The sharp ascent and decline on Monday (16 October) were followed by a drop to the local low near $0.058. On 19 October the bulls seized control once more and were able to register gains. The Relative Strength Index (RSI) was back above neutral 50 and indicated a possible shift in momentum.
The Chaikin Money Flow (CMF) was above +0.05 to reflect significant capital inflow. The On-Balance Volume (OBV) showed the opposite and has trended downward over the past two weeks to signal lowered Dogecoin buying volume. Taken together, the indicators were unclear.
The Fibonacci retracement levels underlined $0.0613 and $0.0626 as critical short-term resistance levels. The former has served as resistance since 5 October and could witness another bearish reaction.
Coinalyze data highlighted bearishness in the market. The Open Interest did bounce higher but the spot Cumulative Volume Delta (CVD) was in a determined downtrend. The inference was that the recent bounce was driven by speculators and not by spot demand, making a bearish reversal much more likely in the next few days.
How much are 1, 10, or 100 DOGE worth today?
Traders could use a rejection near the $0.063 mark by zooming in on lower timeframe DOGE price charts. A bearish market structure flip on the 1-hour chart could, among other things, foreshadow another bearish price move.