What next as Dogecoin bulls attempt recovery

Akashnath S

3 years ago

Dogecoin [DOGE] bulls attempt recovery, force some short-term gains

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 weekend

On 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 advantage

Dogecoin 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.