Dogecoin Price Analysis: 24 May

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice

The Dogecoin community has been growing and many of the new entrants have been wanting to make a quick buck off of it. Elon Musk’s support for the crypto-project has been one of the drivers of DOGE’s price, while other reasons have included coordinated trading. However, all the hype could not help in keeping the price of the digital asset afloat and the bearish attack over the weekend pushed DOGE to $0.3293.

With the digital asset being traded at the said level, the market might be looking at a period of restricted movement in the near term.

Dogecoin four-hourly chart

Source: DOGEUSD on TradingView

DOGE’s 4-hour chart pictured the price collapse within a descending price channel from $0.4367 to $0.2957. However, at the time of writing, the crypto’s price appeared to be breaking out of this formation and was rising higher. Such a breakout could be the price retracing from the sudden fall and DOGE may continue to trade under the $0.3477-resistance level.

Reasoning

With volatility falling across the market, the 50-moving average has remained above the candlesticks. As long as the 50-moving average remains higher above the candlesticks, the trend reversal would be difficult. DOGE has been testing the resistance at $0.3477, but there has not been enough high volume supporting it.

Meanwhile, the support level was marked at $0.2937. DOGE’s value could drop to this level if the selling pressure increases, something that could be a possibility, as highlighted by the Relative Strength Index. The indicator had previously dropped to the oversold zone and bounced back as recovery began. However, it was once again pointing lower at press time, suggesting a rise in selling pressure.

Conclusion

Dogecoin’s market, at press time, was in a recovering phase from the recent fall. However, this recovery might get restricted between the price levels of $0.3477 and $0.2937 as the selling pressure rises. DOGE traders may want to tread lightly in the market as Bitcoin volatility also remains a threat to the price.