Assessing Moves Of DOGE Traders In Case Of Price Breakout
In May, Dogecoin recorded a reversal from the resistance level at $0.22. This set the stage for the bears to take control of the market.
It saw the largest meme token in the market drop below its 20-day and 50-day Exponential Moving Average (EMA) due to the bear run. It resulted in a streak of red candles
Bearish pressure
The meme coin was unable to withstand the bearish pressure, which saw it record further declines. Eventually, DOGE dropped below the important support level of $0.12.
With bulls trying to make a comeback, the best way to staunch the losses would be through a potential reversal.
This would see DOGE move from the immediate support range, which is between $0.096 and $0.01. At publishing time, the meme coin was changing hands at $0.101.
Since the reversal in price from the resistance level of $0.22, there has been a considerable amount of bearish pressure in the market.
In the last three months, there was a 54% decline in the value of the meme token due to this bearish pressure.
This downturn saw Dogecoin form the classic descending triangle pattern on its daily chart. The bears continued to test the price level of $0.129 for more than three months.
They were able to confirm a bearish pattern breakout after three months, with a streak of red candles formed below the baseline.
The bulls
Not long after this breakout, the bulls were able to retest the level. However, they were unable to surpass the 20-day EMA, as DOGE continued its downtrend.
At publishing time, the meme token drew closer to the important support range of $0.01 to $0.096. This range would prove to be of the utmost importance in the future to put a stop to the decline.
The visible range volume profile analysis revealed that the current price of Dogecoin is at the brink of a liquidity zone, which is relatively high.
This indicates that bulls may put up some resistance that would prevent the bears from ensuring more pulldowns.
Thus, if the bulls are able to initiate a reversal from the existing support range, it could help them in retesting the $0.11 to $0.12 range.
The possibilities
If the price is able to climb above the 20-day EMA, then it would push Dogecoin into a low-volatility zone.
However, if the meme token declines below the immediate support range, it could record extended declines that would push it down to $0.08.
At press time, DOGE’s Relative Strength Index (RSI) was in the oversold territory. If it is able to record a reversal, then it would be confirmation of a bullish reversal bias.
Data from Coinglass shows that there was a 12% dip in open interest in the last 24 hours. During this time, there was a 4% drop in price. This shows that traders lack conviction.
This scenario shows the possibility of a consolidation phase or a potential reversal. This depends on the overall movement of the market.
