What next as Dogecoin bulls attempt recovery
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Dogecoin lacked a strong trend on the lower timeframe charts in August.
- The recent price action showed large amounts of volatility could be seen next week as prices could bounce higher in search of liquidity before facing rejection.
Dogecoin [DOGE] saw positive news on-chain recently. A report highlighted the growing number of active users but the market sentiment was firmly bearish after Bitcoin [BTC] fell to $25.1k. The higher timeframe bias has been bearish in August.
Read Dogecoin’s [DOGE] Price Prediction 2023-24
The lower timeframe charts did not show a strong trend for DOGE in August, although the bears had the upper hand. This changed dramatically after the 17 August slump.
The $0.06 saw a positive reaction from buyers over the weekendOn the 1-day chart, a bullish order block was seen at the $0.06 area (cyan). This was previously tested as a support zone on 30 June. Dogecoin was able to establish a rally in July that climbed as high as $0.0834 before the momentum began to shift bearish.
The market structure was bearish in August on the H4 timeframe. The $0.072 zone served as support briefly but the bears forced prices beneath it on 15 August. DOGE noted losses of over 20% after that, falling to $0.0556 on 17 August. Since then, a bounce to $0.064 materialized, but this was not borne out of genuine demand and did not show a bullish revival.
The OBV did not see a significant upward move over the weekend when prices bounced higher. The RSI was also beneath the neutral 50 mark on the 4-hour chart. Overall, another move downward was likely.
Dogecoin futures markets had muted participants and signaled sellers had the advantageDogecoin prices bounced close to 6% since 18 August, but the Open Interest stayed resolutely flat. This was a strong indication that sentiment was bearish as it highlighted the lack of bids from speculators.
Realistic or not, here’s DOGE’s market cap in BTC’s terms
The spot CVD saw a bounce, but in the past 24 hours it began to slide lower as well. The funding rate was close to zero.
The $0.0675 level had been a short-term support back in mid-July. There were bearish order blocks on the 4-hour chart at $0.068 and $0.0655 that were established during the recent dive in prices. Hence these zones could see DOGE bulls rejected after a bounce.