Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- DOGE reversed 5 June’s losses.
- Funding rates and OI improved, but BTC hasn’t reversed its downtrend momentum.
So far, this week has been full of crazy price swings, thanks to the US SEC – Binance lawsuit. On Monday, 5 June, Dogecoin [DOGE] plunged and retested March swing low of $0.0632 after news of the lawsuit.
DOGE reversed almost all the Monday losses on Tuesday. The upside move followed Bitcoin’s [BTC] sharp rebound from $25.4k to $27.4k before easing to $26.8k at press time.
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But BTC is still in a short-term downtrend momentum unless it climbs above $27.5k or $28.5k. If BTC fails to reverse the downtrend, it could expose DOGE to another bull trap.
What’s next for DOGE?
Source: DOGE/USDT on TradingView
A Fibonacci retracement tool (yellow) was placed between a lower high in late April ($0.0837) and a recent lower low in June at ($0.0632). Based on the Fib tool, the 50% ($0.0734) and 38.2% ($0.0710) Fib levels are immediate key resistances.
As such, bulls must clear the above two roadblocks of $0.0710 and $0.0734 to gain leverage. A session close and bullish breaker above the 50% Fib level will flip the market structure bullish.
But before that happens, sellers could still control the market. The price rejection at 38.2% Fib level ($0.0710), seen at press time, could drag DOGE lower to $0.0680 or March swing low of $0.0632. The downswing could be accelerated if BTC drops below $26k again.
At press time, the RSI eased at the median level and had a downtick, showing selling pressure is imminent at the 38.2% Fib level. Similarly, the OBV’s recent uptick made a U-turn, confirming the limited demand in the past few hours.
OI and funding rates improved
Source: Coinglass
How much are 1,10,100 DOGEs worth today?
DOGE’s open interest (OI) rates, the total number of futures or options contracts, decreased from $340 million before the Binance lawsuit to <$300 million post 6 June. The figure hit $290 million on 6 June but has improved to $298 million at press time.
A surge >$300 million could signal hopes of further bullish trend. In addition, the improvement in OI was also matched with positive funding rates. However, bulls can only gain leverage beyond $0.0710 and $0.0734.
Source: Coinglass
