Dogecoin – Another 18% price drop may be on the cards because…
Selling pressure over the last few weeks has been significant.
Key Takeaways
What is the short-term outlook for Dogecoin?
Though there seemed to be some evidence for accumulation on-chain, it likely isn’t enough to prevent another 18% price slide .
Why is such a price slide expected?
Dogecoin’s OBV fell below the lows it established in August – A sign that selling volume inundated the spot market in October.
Dogecoin [DOGE] suffered a bearish setback over the last 24 hours as Bitcoin [BTC] briefly fell to $106.3k, before bouncing higher. At its lowest point, DOGE hit $0.176 on Thursday, 30 June.
This was a 9.34% slide from the day’s high at $0.194. At the time of writing, Dogecoin was exhibiting strong short-term bearish sentiment, with a 3.55% drop in Open Interest in 24 hours. However, the bulls managed to defend the $0.175 demand zone. For now.
Importance of $0.178, and the warning sign for Dogecoin bulls
Bitcoin has been trading within a range since August. This range reached from $124.5k to $107.5k. The brief plunge below the range lows in recent hours suggested that there is a chance for a bullish rebound, provided we see strong spot demand.
Therefore, the chance of a Dogecoin rebound is also present. However, it would depend heavily on the capital inflows to the market in the coming days. Recently, though the $0.175-$0.185 demand zone has been defended, the selling pressure has been high too.
This was evidenced by the OBV forming a new low, below the baseline it had established back in August. In fact, the recent selling volume has been overwhelming. And, it appeared that it may be only a matter of time before the bulls cave to the pressure.
If Dogecoin falls below $0.175, the next support level would be the $0.15-level. This has been the base of the rising wedge pattern that began in June.
The daily active addresses have been falling in October. This hinted at reduced network activity and a fall in organic demand for Dogecoin. However, the mean coin age saw an uptick over the past two weeks.
This could be a sign of on-chain accumulation, despite the spot selling seen on the price charts. The age consumed metric saw some spikes recently too, but nothing extreme.
Overall, though the aforementioned findings seemed encouraging, they are unlikely to be enough to overturn the selling spree witnessed in recent weeks. Hence, a bearish bias and a price drop to $0.15 can be anticipated.
