Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- DOGE has bullishly reversed its three-day market structure.
- A move above the trendline resistance could cause the meme coin to rise again.
Dogecoin [DOGE] managed to defend the $0.056 support zone again. This has happened five times since September 2022. DOGE holders made huge gains and the MVRV ratio has only increased over the past week.
Read Dogecoins [DOGE] Price forecast 2023-24
This was a factor that raised concerns that DOGE would see a decline. A look at the price chart also suggested that a small dip could be imminent. Here are some scenarios traders can prepare for.
DOGE bulls battled an HTF trendline resistance
Source: DOGE/USDT on TradingView
On the three-day chart, the market structure was bullish after the move above the recent lower high at $0.06858. The RSI also crept above the neutral 50, indicating the bulls have an edge. On-Balance Volume has also been on a slow upward trend since July.
Since December 2022, DOGE has formed a series of lower highs. There were some rallies in the intervening months, but a convincing uptrend on the higher horizons failed to materialize.
This past month, DOGE saw another such rally. The late 2022 trendline resistance (yellow) halted the bulls’ progress again.
Above $0.0686 and the trendline resistance, the $0.083 and $0.095 levels were the next major resistance levels.
Hyblock data revealed some information that traders and investors could benefit from
Source: Hyblok
The heatmap of liquidation levels with a one-year lookback period showed that a move towards the $0.081 and $0.086 regions could lead to a large number of liquidations.
With DOGE trading above $0.066, in the previous HTF liquidation region of interest, a move towards $0.086 could be expected.
Source: Hyblok
AMBCrypto’s analysis of liquidation levels in the lower time frames showed that short sellers could find a profitable trade.
The Cumulative Liq Levels Delta was in the red, indicating that short sellers who were already in a position could face some problems if prices rose. In the north, the $0.0069-$0.0705 zone has several short liquidations worth several million dollars.
Realistic or not, here is DOGE’s market cap in BTC terms
Moreover, the $0.07 area coincided with the trendline resistance on the higher time frame. Therefore, short sellers might wait for another visit to this zone before going short.
This short-term idea would be negated if DOGE rises above $0.0725. Their take-profit target would be $0.06523, almost 7% below $0.0705.