DOGE: What the weak support level signifies

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

• DOGE’s price remained above the critical $0.06 support level.
• However, its price action and indicators suggested that buyers could be overwhelmed by selling pressure soon.

The market correction over the past day curtailed Dogecoin’s [DOGE] bullish advancement from the $0.06 support level. However, buyers held up the support, with the meme coin trading at $0.0617, as of press time.

How much are 1,10,100 DOGEs worth today?

A 0.87% decrease in the global crypto market cap led by Bitcoin’s [BTC] drop from $27.1k to $26.6k could see the bullish defense of the support level end prematurely, due to increasing selling pressure.

Selling pressure could break weakening support level

Source: DOGE/USDT on Trading View

The $0.06 support level has been a strong rallying point for bulls. The bullish rally to the Q3 high of $0.0838 began from the level in mid-June. Also, the level has served as a key price defense to halt sustained selling pressure.

Nonetheless, the recent price action around the level pointed to bullish exhaustion. Multiple retests of the level have suppressed the buying pressure of bulls, and the on-chart indicators hinted at a break below the level.

The Relative Strength Index (RSI) dipped below the neutral 50 to highlight the loss of buying power. Similarly, the Chaikin Money Flow (CMF) fell from +0.11 to +0.02. This hinted at capital preservation moves by DOGE traders.

Therefore, a break of the $0.06 support would see sellers target the $0.0557 to $0.0580 price zone. On the other hand, if bulls are able to hold the support level and BTC recovers, buyers can push for gains at $0.0640 to $0.0670.

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

Speculators leaned toward extension of bearish market structure

Despite the recovery at the $0.06 support, Open Interest (OI) fell by 2.13% over the past 24 hours. Per Coinalyze, the OI declined from 221.3 million to 212.7 million. This hinted at a lack of conviction by market participants in DOGE’s recovery.

Likewise, the spot CVD continued to trend downwards. This showed that market speculators were actively reducing their exposure to DOGE in anticipation of an extension of its bearish market structure.