Sentiment or not, should you bet on Dogecoin rallying soon

Since falling from its October highs, Dogecoin (DOGE) kept testing the $0.162-mark multiple times and flipped it to resistance. Since then, it has been marking lower lows until it gravitated towards the $0.11-floor.

From here on, a conclusive close above its trendline support (white, dashed) would position DOGE for a re-test near its EMA ribbons before a likely pullback from the $0.12-zone. At press time, DOGE was trading at $0.1165, down by 5.53% in the last 24 hours.

DOGE 4-hour chart

Since reversing from the $0.33-mark, the meme coin has declined by over 68% and plunged towards its ten-month low on 24 February. Except for a few times, the EMA ribbons refrained from undertaking a bullish flip over the last four months.

The downslide led the alt to lose the crucial $0.1360-mark, one that the bulls upheld for over ten months. The latest bearish engulfing candlesticks created a strong supply zone between the $0.123-$0.119 range. Furthermore, the Point of Control (red) and the 50 EMA would continue to pose a strong recovery barrier for bulls.

Going forward, the current trendline support is critical for the buyers to defend to prevent fallout. Keeping in mind the improving overall sentiment, a close above this support would lead to a POC retest before falling back into its long-term downtrend.

Rationale

As the bearish RSI broke down from its midline support, it seemed to flatten at the 33-36 range support. Any recovery from this zone could open up chances for a test of its immediate resistance. 

Furthermore, CMF swayed above the midline and projected a bullish divergence with price. This reading entailed a bullish resurgence possibility. But with MACD lines undertaking a bearish crossover, the bulls will find it tough to defend the $0.115 support. In this case, a further fall towards the $0.111-mark before a reversal could be conceivable.  

Conclusion

With a bullish divergence on the CMF, a near-term comeback towards its 50 EMA would be probable. But for that, the bulls need to ensure the trendline support and propel a recovery on higher volumes. However, the meme coin shares a 77% 30-day correlation with the king coin. Thus, keeping an eye on Bitcoin’s movement would be vital to complement these technical factors.