DOGE: What to expect after latest dip
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Dogecoin has a bearish structure on the 4-hour chart.
- If Bitcoin bounces higher, DOGE would likely follow – but the $0.068 resistance zone could rebuff the bullish efforts.
Dogecoin [DOGE] saw a strong rally initiated in June. The price went from $0.058 to $0.0835, a 44.2% rally in 41 days. The market structure of the coin flipped bearishly on 15 August, when DOGE bulls were unable to defend a key support level at $0.0725.
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In the past 36 hours, Bitcoin [BTC] fell from $25.8k to $24.9k, where some buyers entered the market. This drove a bounce in prices, and BTC was trading at $26.1k at press time.
Despite the short-term volatility, it appeared likely that further losses were in store, although a move higher in search of liquidity could not be ruled out.
The bearish order block could offer a good entry- but what are the chances of a retest?
A BTC bounce toward the $28k-$28.5k resistance was a possibility. The trading volume in the crypto market was low, and the sentiment was bearish, but the $25k area was a higher timeframe demand zone.
Similarly, Dogecoin was also trading within a higher timeframe demand zone (cyan box) that stretched from $0.0581 to $0.0622. This region was a bullish order block from 14 June on the 1-day chart.
On the other hand, the OBV in the 4-hour timeframe showed no influx of buyers and remained in a steady downtrend to highlight seller dominance.
The RSI showed neutral momentum with a reading of 46, and the market structure was bearish on the H4 chart. The $0.062 and $0.064 levels are important short-term resistances where the bears could take control of the market once more.
The spot CVD showed bulls have some hope in the coming days
On 11 September, DOGE bounced from $0.0597. The Open Interest climbed by close to $10 million, showing speculators were willing to bet on short-term gains.
How much are 1,10,100 DOGEs worth today?
The funding rate was positive again, and the spot CVD saw a bounce in recent hours. Yet it remained in a downtrend and was not a strong piece of evidence to suggest bulls were in control again.
However, if a bounce occurs, it is possible that it could reach as high as $0.066 before facing a reversal. This could present an attractive risk-to-reward shorting opportunity, targeting the recent lows at $0.0597.