Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The lower timeframe structure of DOGE was bearish on the charts.
- The support zone at $0.071 could see a minor bullish reaction.
The higher timeframe price charts of Dogecoin [DOGE] showed strong bearish pressure on one of the most popular meme coins. The $0.08 region has posed stern resistance since early March, and this does not look likely to change soon.
Read Dogecoin’s [DOGE] Price Prediction 2023-24
Bitcoin [BTC] could see some volatility after dropping to $26.5k on 27 March. In this scenario, a bounce for DOGE would offer short sellers a better risk-to-reward region to sell Dogecoin.
A drop below the $0.071 support could open the gates for short-term bears
Source: DOGE/USDT on TradingView
There were two scenarios that short-term bears can watch out for. One is a drop beneath the $0.071 region, highlighted in cyan. This would be a strongly bearish scenario, and bears can look to short the retest of this region as resistance. They can target the zones of support at $0.068 and $0.065 to take profits. An extremely wide stop-loss can be used above the recent Monday’s swing high.
The blue line at $0.0713 marked a strong lower timeframe zone of support for DOGE. The second scenario that could unfold was a bounce from this region that reached the $0.075-$0.078 area.
A move into this zone can also be shorted, with a stop-loss above the $0.0805 mark. This could offer a better R: R trade and sellers can take partial profits at the support zones if they choose to.
The RSI on the two-hour chart has not surfaced above neutral 50 since 24 March, which highlighted a near-term downtrend. The CMF was also at -0.10 to indicate significant capital flow out of the Dogecoin market.
Realistic or not, here’s DOGE’s market cap in BTC’s terms
The Open Interest decreased after Monday’s volatility
Source: Coinalyze
Dogecoin reached a swing high of $0.0764 on Monday and dropped to test the $0.0713 support level just a couple of hours later. This constituted a drop of 6.7%, and the futures traders remained sidelined or lost money.
The Open Interest dove from $261 million to $243 million after this move, and Coinalyze’s data showed $1.6 million worth of long positions were liquidated in those two hours. However, the predicted funding rate was positive, which hinted at slight bullishness. Overall, the inference was bearish sentiment toward DOGE.