Key Points:
- Dogecoin’s recent rally breached $0.063 but faced a swift retracement.
- Bearish momentum gains strength with RSI and DMI indicators turning bearish.
- Uncertain one-day chart prompts buyers to consider entry points at $0.06 or a $0.064 breakout.
In recent hours, the dynamics of Dogecoin, as revealed by its indicators and price action, have favored the strength of the sellers. Nevertheless, the question arises: are the bulls contemplating further losses before making their move on this meme coin?
On September 28th, Dogecoin’s bullish momentum kicked off following a descent into a demand zone. This rally managed to breach the local resistance level at $0.063, but within the past 24 hours, the bears swiftly triggered a retracement.
A prior analysis of Dogecoin by AMBCrypto on September 17th noted the significance of the $0.06 support level. The report suggested that a bullish turn in Bitcoin (BTC) could potentially propel DOGE towards $0.064 and beyond. However, over the last two days, Dogecoin’s bearish side has exhibited remarkable resilience.
Dogecoin is now contemplating another descent towards its support level as the momentum takes a bearish turn.
The four-hour Relative Strength Index (RSI) has dipped below the neutral 50 mark, signaling the onset of bearish momentum. The market structure also reflects a bearish tone, particularly since the breach of the higher low at $0.0617 on October 1st.
The Directional Movement Index (DMI) reinforces the presence of a strong bearish trend, with both the -DI (red) and the Average Directional Index (ADX) (yellow) surpassing the 20 mark. Collectively, these indicators, in conjunction with the price action, emphasize the prevailing strength of the sellers in recent hours.
On the one-day chart, Dogecoin’s trend appears rather uncertain, oscillating within the range of $0.06 to $0.0635 since September 10th. Consequently, buyers might consider entering long positions either at the $0.06 support level or upon a breakout beyond the $0.064 resistance.
Short-term bullish sentiment has waned, as both BTC and DOGE have experienced a pullback.
Just prior to Bitcoin reversing its bullish momentum at the $28.5k mark, Dogecoin encountered resistance at the $0.0642 level. This pullback in BTC contributed to the bearish pressure on altcoins, including DOGE.
This sentiment shift is evident in the declining Open Interest (OI) on October 2nd, as prices retreated from the $0.064 area. The diminishing OI, coupled with price depreciation, signifies the discouragement of long positions and the prevalence of bearish sentiment. Additionally, the spot Cumulative Volume Delta (CVD) has also displayed a decline over the past 24 hours.
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Disclaimer: Please note that the viewpoints and perspectives expressed by the author, as well as any individuals referenced in this article, are intended solely for informational purposes. They should not be construed as financial or investment advice. It’s important to acknowledge that investing in or trading cryptoassets carries inherent financial risks.
