Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
Spurred on by Bitcoin’s hike above $47k, Dogecoin attempted to rejuvenate buying pressure around the $0.193-support. A close above the 20-SMA (red) and baseline of a previous descending triangle would lay the foundation for a sharper recovery.
At the time of writing, DOGE was trading at $0.213, up by 8% over the last 24 hours.
Dogecoin Daily Chart
Source: DOGE/USD, TradingView
A timely broader market intervention allowed DOGE to ground its feet at the $0.193-support and forage for some more buying pressure. The downside was that the 20-SMA (red) would limit DOGE’s resurgence. The baseline of DOGE’s descending triangle ($0.232) also functioned as immediate resistance and presented a viable take-profit for scalpers.
Ideally, DOGE would tread carefully between its immediate channel of $0.193-$0.232, before generating momentum for a price swing. Should DOGE remain within this channel, bears would be in a prime position to trigger more losses.
A move below $0.160 would allow for a retest of $0.152. If sellers further capitalize on these chinks in DOGE’s armor, another 22% decline would be possible towards $0.120. To overcome these predictions, DOGE needs to set legs above the confluence of its 200-SMA (green), 50-SMA (yellow) and $0.264 resistance.
This will not be so easy considering that DOGE had to advance by another 20% before testing this area.
Reasoning
DOGE’s RSI was still in a weak position and needs to climb above 55 to invite some more bullish speculation. Meanwhile, the Directional Movement Index was almost unhinged from its bearish position. The +DI had to close a huge gap to hike above the -DI line.
Bulls will hope that the MACD’s bullish crossover is enough to generate a significant amount of buying pressure to topple some important price ceilings up ahead.
Conclusion
DOGE’s rebound from $0.193 was a much welcome change, but weakness still persists in the market. In order to flush out sellers, DOGE has to smash past $0.232 and register a close above $0.264.
Failing to do so would lead to some rangebound movement before sellers initiate further drawdowns.
