- DOGE showed a bearish bias despite the 16% rally a few days ago.
- Sentiment in the futures market was bearish after the losses of the past ten days.
Dogecoin [DOGE] showed strong signs of a bearish trend reversal. The market structure and momentum were bearish and losses of 12%-22% seemed likely based on the price action over the past ten days.
The unsubstantiated claim that Kabuso, the Dogecoin mascot, had died on January 10 sent prices soaring to the $0.083 mark. AMBCrypto confirmed that this was not the case and highlighted the memecoin’s social statistics.
The volatility was not entirely unexpected
Source: DOGE/USDT on TradingView
The 12-hour price chart above showed the $0.085 region providing strong resistance in mid-November. In early December the region was turned to support and then defended for a month.
Due to the intense sales on January 3, this region once again became a supply zone. It was tested again on January 11 as resistance. The bulls tried to push prices above $0.087 but failed. The market structure and momentum based on the RSI in the second half of the year showed that the bears were dominant.
On the other hand, OBV has gone up over the past week. Despite the downward trend over the past two weeks, it hasn’t taken a major hit. This suggested that the sales volume was not large. However, traders can expect the losses to continue.
The Fibonacci levels (light yellow) showed the 61.8% level serving as resistance during the attempted rally. The subsequent rejection meant that the 23.6% southward expansion level was the next target.
The revival of spot purchases could lead to a new revival
Source: Coinalyse
Since January 3, Open Interest behind DOGE contracts has fallen from $400 million to $282 million. This decline, combined with the price decline, indicated bearish sentiment and discouraged longs in the futures market.
Realistic or not, here is DOGE’s market cap in BTC terms
However, since January 9, the CVD spot saw a small jump. This was a sign of demand.
If buyers can keep this up, it could entice futures traders to enter the market and drive DOGE higher. The $0.08188 and $0.0835 levels are key resistances on the lower time frames.
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
