Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Sentiment continued to be bearish behind DOGE on higher time frames.
- The defense of this zone in 2023 meant that a short move below could trap early short sellers.
A May 12 report highlighted Dogecoin’s bearish bias on the higher timeframes. The on-chain metrics showed heightened selling pressure in May and the possibility of DOGE being undervalued. This has not changed.
Read Dogecoins [DOGE] Price Forecast 2023-24
Bitcoin’s foray below the $26.2k mark showed that bears remained strong and bounces were treated as temporary rather than trend reversals. However, Dogecoin was approaching key support that had been defended since late December. Can traders expect the range lows to persist?
Momentum and structure favor the bears as buyers have little say in the market right now
Source: DOGE/USDT on TradingView
The preliminary range formation (yellow) has stretched from $0.097 to $0.066, and the mid-range marker (dotted orange) has served as both support and resistance in 2023.
Since mid-April, DOGE has been in a steady downtrend after failing to climb back above $0.09.
It broke below the mid-range at $0.082 on April 21, also breaking the previously bullish market structure. The OBV is falling and the RSI has not been able to climb above the neutral 50 since then.
Together they showed strong sales and a steady downward trend. The next bearish target is the USD 0.066 support, but a move below it cannot be ruled out either.
A move to $0.06 before a reversal would indicate a liquidity hunt in the event of a bounce back above $0.066.
Therefore, bearish breakout traders should be careful about shorting DOGE in that area, while short traders can take profits there.
Complete lack of bullish persuasion from speculators
Source: Coin analysis
Coinalyze’s 4-hour chart showed Open Interest falling continuously over the past week. The price was also falling at that time. This showed discouraged bulls and significant bearish sentiment.
Source: Mint glass
How much are 1, 10 or 100 DOGE worth today?
The liquidation charts also showed that May was dominated by long positions that were liquidated as prices continued to fall.
Therefore, cautious traders can wait for a reaction, or lack thereof, from the $0.06-$0.066 area before swinging.