Over the past 24 hours, Dogecoin (DOGE) witnessed a significant decline of 9.7%, while experiencing a notable 89% increase in trading volume. This surge can largely be attributed to the substantial selling pressure seen in the market recently.
Amid Bitcoin’s ongoing challenge to surpass the $100k mark, Dogecoin faces an uncertain short-term outlook. The crucial levels to watch in the coming days are $0.336 and $0.375.
Struggle for Dogecoin Bulls at the $0.37 Mark
In the middle of November, the $0.35-$0.38 range was identified as a support area following a rapid rally earlier in that month. However, this support region broke down in the latter part of December, leading to a dip in DOGE’s price to $0.262.
Prior to the current date by approximately three weeks, Dogecoin showcased bullish momentum during the initial days of the year. It managed to break out from a symmetrical triangle pattern (depicted in white) and surged to $0.398, reclaiming the $0.36 level as support. Unfortunately, the price fell below this crucial support level within the last 24 hours.
The next immediate support to monitor stands at $0.336, which served as a consolidation area on lower time frames before witnessing a swift upward movement on January 3rd.
An analysis of the 6-hour chart indicates a diminishing bullish trend as illustrated by the Awesome Oscillator. Moreover, the Directional Movement Index (DMI) hints at a weakening bullish momentum, with the -DI (in red) crossing above the +DI (in green).
Temporary Hurdle or More Downside Potential Ahead?
Reviewing the liquidation heatmap of the past month, it is evident that the $0.42 level emerged as a strong magnetic area within close proximity. Furthermore, the $0.3 region also appears noteworthy. In the event of increased bearish pressure from Bitcoin, Dogecoin might observe a decline towards the liquidity pool at $0.3.
These liquidity zones hold significance as they could trigger a temporary price reversal. On longer timeframes such as the daily chart, the market structure for DOGE appears bullish; however, the $0.37 range remains a critical and fiercely contested zone.
Disclaimer: The opinions expressed in this article are subjective and do not constitute financial, investment, or trading advice.