Despite recent Dogecoin price relief, increasing sell pressure and Futures data suggest a risk of further declines. DOGE needs to stay above $0.09.
Dogecoin price broke out of a falling wedge in the early hours of Monday Morning, signaling a bearish reversal. The 4-hour price chart shows DOGE has gotten some relief from the downtrend as the price has picked up over the last few hours. However, DOGE price is not out of the woods yet, as Futures data shows that there is increasing sell pressure on the asset, which puts over $1.4 billion worth of DOGE at risk of sinking into losses.
Dogecoin Price Facing Rejection at Resistance
The current trend for DOGE price is downward, indicated by the price trading below the 200-day (black line at $0.115) and hovering just above the 50-day exponential moving average (EMA) (green line at $0.105). The recent price action suggests continued bearish momentum.
The nearest resistance level for Dogecoin’s price is $0.105 (aligned with the 50-day EMA), while a more significant resistance exists at 0.11518 (200-day EMA).
The immediate support is around $0.093 (orange line), and stronger support lies in the $0.080 – $0.085 range (grey zone).
The rising wedge has broken downwards, which is a bearish sign. The most recent candles suggest increasing selling pressure as prices approach support levels.
The Relative Strength Index (RSI) is at 50.34, which is neutral but shows a slight bearish bias, as it’s trending down from overbought levels. The Chaikin Money Flow (CMF) is at -0.11, indicating mild selling pressure, which could increase if the Dogecoin price continues to drop.
There has been a consistent volume during the wedge formation, with a spike during the breakdown. This confirms the bearish breakout, with volume supporting the downward move.
Dogecoin price prediction shows that if it surges above the 200-day EMA, it may invalidate the falling wedge bearish reversal pattern and rise to $0.14 as the new price target.
On-Chain and Futures Support Correction
The Dogecoin open interest (OI) dropped by 1.95% in the last 24 hours, indicating that the DOGE market is losing funds. DOGE price also dropped 1% during the same period of time to trade at $0.105.
Combining these two data points shows that DOGE traders who are Long on the asset are closing their positions.
Additionally, the 4-hour cumulative volume delta (CVD) from Coinalyze, which shows the difference between buy and sell volumes within the last 4 hours, is negative, indicating that more people are selling than buying.
When both OI and CVD decrease, it indicates that traders are closing Long positions, signaling a bearish trend.
Data from IntoTheBlock revealed that over $1.4 billion worth of DOGE is at risk of losing value if the Dogecoin price slips below $0.09.
Currently, 45.16% of all DOGE holders are in profit. If the price slides below this crucial support level, the percentage of profitable holders could drop by 19%.
On a positive note, data from Messari Research analytics shows that Dogecoin’s active addresses recently witnessed a spike, which suggests that investors may be taking an interest in the blockchain.
Overall, the bearish Futures metrics outweigh the single on-chain metric from the Dogecoin blockchain. While active addresses suggest real users and activity on the network, the current selling pressure on DOGE may suppress the metric’s impact.
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