Analysis
Dogecoin [DOGE] drops to key support; are shorting gains limited
Dogecoin [DOGE] has slid to a key support level and could witness a recovery if BTC maintains the $28k zone.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Structure on H4 was bearish at press time.
- Open interest dipped slightly, but funding rates were positive.
Dogecoin [DOGE] hasn’t recovered from losses sustained in the second half of April. In the past ten days, price action oscillated between moving averages and a bullish order block (OB) on the four-hour chart (cyan).
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At press time, price action dipped further towards the bullish order block near $0.07600 – a crucial support throughout April. Will it hold in May and rescue near-term bulls again, or can sellers crack it?
Will bulls prevail?
Source: DOGE/USDT on TradingView
Previous retests on the bullish order block (cyan) have led to a recovery. If the trend continues, DOGE could rebound and inflict a short-term recovery.
Hence, a direct or pullback retest on the $0.07600 – $0.07728 zone could set DOGE to rally toward the local overhead resistance level at $0.08098. The resistance level also lines up with 50-EMA ($0.08083). Above this level, the next obstacles exist at 200-EMA ($0.08216) and $0.08481.
Conversely, DOGE could witness more aggressive selling if the support cracks. A close below $0.07600 could sink DOGE to lower supports at $0.07322 or the March swing low of $0.06500 in an extreme downswing scenario. The downtrend could be accelerated if Bitcoin [BTC] drops below $28k.
Meanwhile, RSI hit 40 at press time while the stochastic RSI slid into the oversold zone – confirming a dip in buying pressure. But the oversold condition suggests sellers may seek a break soon.
However, OBV remained flat in the past few days but dipped at press time – confirming limited demand.
Open interest rates dipped slightly, but …
Source: Coinglass
Read Dogecoin’s [DOGE] Price Prediction 2023-24
Moreover, open interest (OI) rates on 30 April stood at $374.632M but dropped to $355.026M at press time. The outflows indicate a short-term bearish sentiment in the futures market and could favor sellers.
However, the funding rates remained positive in the past few days, which could spoil sellers’ efforts. But an improvement in OI alongside positive funding rates could confirm a bullish momentum and possible recovery.
Source: Coinglass
