The Future of DogeCoin Hangs in the Balance at $0.11: Traders Prepare for Potential Large Sell-Offs
During the previous month, Dogecoin [DOGE] experienced notable increases in its price, rising by 13.66% on the trading charts. This surge propelled the meme-based cryptocurrency from a low of $0.088 to a peak of $0.132.
Nevertheless, within the last 24 hours, DOGE has witnessed a moderate recovery, with a 2.8% increase. Presently, Dogecoin is being exchanged at $0.108. This reflects an 11.422% drop in weekly trading data.
The recent price movements have raised uncertainties regarding whether Dogecoin will recover and resume its upward trend for the month or if the market will fall under the control of bears.
In light of this, prominent cryptocurrency analysts Ali Martinez and Kevin have pointed out certain conditions that need to be met for another sustained upward trend.
Current Market Sentiment Analysis
In his assessment, Kevin suggested that the prevailing market conditions are favoring bearish sentiments.
As per the analyst, DOGE broke out of the macro falling wedge, signaling a bearish trend.
Furthermore, the memecoin has fallen below all significant 1-day and 4-hour Moving Averages (MA), which presents another bearish sign.
Consequently, the analyst contended that Dogecoin must retrace back to $0.08 and establish new support before attempting an upward movement.
Contrastingly, Martinez highlighted the case of 60210 accounts holding 36.40 billion DOGE at $0.11.
According to this evaluation, DOGE needs to reclaim the resistance level of $0.11 to maintain a positive outlook. Failure to do so could trigger a substantial sell-off as investors look to curtail their losses.
Typically, such a significant sell-off would lead to further price declines, extending the prevailing bearish trend that has been observed over the last week.
Insights from DOGE Charts
Undeniably, the assessments provided by Martinez and Kelvin outline a bearish perspective. The question arises – What do the other metrics indicate?
Initially, Dogecoin’s Open Interest per exchange has decreased over the past week from $224 million to $129.6 million.
This drop suggests that investors are closing their positions without new participants entering the market, signaling a bearish market sentiment.
In addition, Dogecoin’s price DAA divergence turned negative three days ago. A negative DAA divergence indicates a decrease in user participation within the DOGE ecosystem.
Consequently, the recent surge in prices seems to be driven more by speculation than by solid fundamentals.
Lastly, Dogecoin’s daily active addresses have dwindled from 144.8k to 74.7k over the last four days. A decline in active user engagement implies a potential decrease in demand or interest in the meme-based cryptocurrency.
In summary, even though DOGE has shown a slight rebound on daily charts, the losses endured on a weekly basis outweigh these recent gains.
Therefore, if the current sentiment persists, will Dogecoin be able to hold its next support level at $0.098? Conversely, a reversal in trends could witness Dogecoin recovering the $0.011105 mark.