Dogecoin consolidates below moving averages, what are the chances of breakout

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

• DOGE formed a bearish flag pattern. 
• Long positions sustained more liquidations. 

Dogecoin [DOGE] has been in price consolidation since 22 April 2023. It oscillated between $0.0763 and $0.0816, and the sideway structure could extend if the current market conditions persist. 

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

The crypto market has seen heightened choppiness before and after the Fed rate hike. During the same period, Bitcoin [BTC] dropped from $30k to $27.67k but has since edged higher to $29k, only to face rejection again. 

A bearish flag formation – Will sellers gain more ground?

Source: DOGE/USDT on TradingView

At press time, DOGE’s value was $0.07697, and bulls tried to secure the lower range boundary near $0.0763. Notably, the RSI has been below the 50-mark since late April, while the OBV (On Balance Volume) remained below $500 billion. 

Moreover, price action was below the moving averages (50 EMA and 100 EMA) and formed a bearish flag pattern – reiterating the prevailing sellers’ leverage. As such, a bearish breakout couldn’t be overruled, especially if BTC falls below $28k. 

Such a move could see DOGE drop towards the March and January swing lows of $0.06250 in the coming days/weeks. Any further drop beyond this key support in Q1 2023 could see DOGE hit the bearish target of $0.05828 based on the flag pole height. 

A daily session close above the 50 and 100-EMAs will confirm a strengthening structure. Such an upswing will invalidate the bearish thesis, especially if BTC reclaims $30k. However, the uptrend could set DOGE to rally toward the Q1 price ceiling near $0.09500. 

More liquidations of long positions

Source: Coinglass

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According to Coinglass, over $1 million worth of long positions were wrecked on 6 May compared to only $9.3k worth of short positions. 

At the time of writing, over $31k of long positions were liquidated, compared to only $4k of short positions. The trend showed that selling pressure was rising in the futures market and could lower DOGE prices if it persists. 

In addition, there were increased fluctuations in funding rates in the past two days – wavering demand that could frustrate bulls’ efforts. But if BTC reclaims $30k, DOGE bulls could aim at $0.09500. 

Source: Coinglass