Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
-DOGE was likely carried higher by a social wave and not by buyers.
-While this suggested a retracement was likely, Bitcoin could have other ideas.
Elon Musk offered 1 million Dogecoin [DOGE] to anyone who could prove that he owned an emerald mine, and DOGE posted gains of 4.9% since then. Previously, his announcement of the Twitter logo change to the Shiba Inu dog saw Dogecoin shoot upward by 30% on the charts.
Read Dogecoin’s [DOGE] Price Prediction 2023-24
While the technical structure remained bullish on the higher timeframes, there was a noticeable lack of buying pressure behind the meme coin. Should traders get ready to enter short positions soon?
The bearish order block at $0.095 was yet to be broken
Dogecoin has formed a series of higher lows and higher highs after its recovery above $0.072 on 14 March. The $0.07 area was flipped to support once more. The OBV showed some demand from then to the beginning of April, and the first few days of April saw DOGE briefly claw its way above $0.1.
The bulls could not hold on to their gains. In recent hours, the 1M DOGE bet saw the asset appreciate by another 5%, keeping the hopes of the bulls alive. Yet it remained likely that sellers could begin to dominate.
While the RSI continued to move above neutral 50 to indicate bullish momentum, the OBV sank extremely deep after the brief foray above $0.1. The selling volume in early April saw the OBV post a lower low, yet the price continued to trend higher. This divergence meant buyers should be cautious, and sellers can wait for a break in structure on lower timeframes before seeking to enter short positions.
Daily active addresses sweep higher as social media buzzed about Dogecoin
Santiment data showed that the 90-day mean coin age has slowly slid downward since mid-March. This highlighted the possibility of increased selling pressure owing to the heightened activity in coin transfers in the network.
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The 30-day MVRV ratio was close to zero and did not indicate a threat from profit-takers. The daily active addresses were on the rise in the past two weeks, especially after Elon Musk replaced the Twitter bird icon with a Shiba Inu dog.
Bitcoin [BTC] could continue to rally toward $32k or higher still, which could cause DOGE to surge higher as well. Hence, bears must operate with this possibility in mind.