Dogecoin’s bullish recovery rejected – what’s next?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Bullish recovery rejected at new resistance level.
- Lack of conviction in the Futures market could see DOGE experience range-bound movement in the short term.
Dogecoin’s [DOGE] recovery faltered at the $0.06 resistance level. This was after a wave of selling saw price dwindle below a critical support level for buyers on 9 October.
Read Dogecoin’s [DOGE] Price Prediction 2023-24
A technical analysis of Dogecoin by AMBCrypto on 11 October noted that the breach of this support zone presented a good shorting opportunity for sellers in the market. While sellers did record some shorting gains, buyers rallied quickly to attempt a recovery of the level.
However, bears were in no position to give up the new resistance zone, leading to a price rejection at the $0.06 level.
Another sideways price action for DOGE?
A look southward on DOGE’s price action revealed that the last significant breach of a support level on 17 August led to an extended period of range-bound price action for the memecoin.
The breach of the $0.06 support could lead to the same outcome. This is due to the nearby support level of $0.055. If the bulls defend this support level and bears continue to hold strong to the $0.06, a series of rebounds and pullbacks off the support and resistance levels could occur.
The On Balance Volume (OBV) hinted at the price range possibility, as it continued to decline steadily. A lack of sufficient trading volume would result in reduced volatility.
On the other hand, the Relative Strength Index (RSI) highlighted the bullish rebound, climbing out of the oversold zone. Yet, it failed to scale the neutral 50, revealing that buyers didn’t have the needed buying power.
Speculators not impressed by bullish recovery
Realistic or not, here’s DOGE’s market cap in BTC’s terms
Despite the recovery attempts by bulls, market speculators didn’t buy into it, as evidenced by the spot Cumulative Volume Delta (CVD). The spot CVD maintained its extended decline, highlighting a severe lack of demand for DOGE in the futures market.
While the Open Interest (OI) registered a decent uptick over the past 24 hours, it wasn’t enough to swap the bearish sentiment in the short term. However, DOGE traders should keep an eye out for Bitcoin’s [BTC] price action, as this can quickly change market sentiment.