Going long on Dogecoin [DOGE]? Here’s what you need to know
- DOGE was strongly bullish
- It faces a bearish order block around the 100% Fib level ($0.10790)
- Declining development activity and negative sentiment could undermine further near-term price recovery
Dogecoin’s (DOGE) price rally began on 22 November after BTC reclaimed the $16,000 level, and at the time of writing, it resulted in a price increase of over 40%.
At press time, DOGE was trading at $0.10649, up 3% in the last 24 hours.
However, it faced an important bearish order block around the 100% Fib level. If the bulls of DOGE maintain upward momentum, a bearish breaker could shatter the current resistance and target $0.11652.
Double resistance at the 100% Fib level and a bearish order block
DOGE faced two closely spaced obstacles in the 4-hour time frame. One was the immediate bearish order block zone, and the other was the 100% Fib level. Can the bulls breakthrough both at the same time?
The technical indicators on the 4-hour timeframe suggest that the bulls could break through these obstacles. In particular, the Relative Strength Index (RSI) was at 66 after avoiding the neutral 50-level and continuing to rise. This shows the bulls have too much leverage and could move on with the uptrend momentum.
At press time, the on-balance volume was also supporting the bulls in their forward momentum. It moved steeply higher despite a slight sideways movement. It showed that trading volumes have increased, which gives the bulls enough buying pressure to overcome the two obstacles.
Thus, if the uptrend continues, DOGE could see a bearish breaker and breach the 100% Fib level ($0.10790).
However, a break below the current support at the 78.6% Fib level ($0.10010) would invalidate the above bias. In that case, the bulls could find new support at the $61.8% level ($0.09396).
DOGE recorded negative sentiment and a decline in development activity
That said, DOGE recorded a steady increase in development activity from 21 November, which peaked on 28 November. During the said period, the prices of DOGE also increased. However, the decline in development activity at the time of publication also coincided with weighted sentiment sliding deeper into negative territory.
Although DOGE has risen despite the continued negative sentiment in the past, the decline in development activity could prevent further price appreciation. The BTC’s performance could also affect the price performance of DOGE, so investors should keep an eye on it.