Money

Dogecoin: taking short positions is really the way to go

Disclaimer: The findings in the following analysis are the sole opinions of the author and should not be taken as investment advice.

Battered, bruised, and possibly overshadowed by its smaller counterparts, Dogecoin has had a rough month and a half. Since mid-August, the meme coin leader has lost nearly 45% of its value after falling below key levels. Additionally, a breakout of the descending triangle and a possible pullback to the lower trend line exposed DOGE to further declines in the coming days.

If sellers can push the crypto below the $ 0.155- $ 0.175 demand zone, the market will see severe bleeding.

Dogecoin daily chart

Source: DOGE / USD, TradingView

Despite the fact that Dogecoin presented a ray of hope in August, the crypto’s price was immediately rejected above its Fibonacci level of 23.6%. A breakout of the resulting descending triangle triggered another drawdown after the bulls failed to hold DOGE above $ 0.232.

Since a pullback was in effect at press time, the market appeared to be extremely vulnerable to a dip towards $ 0.155- $ 0.175. Ideally, this demand zone would provide a platform for buyers to step in and respond to selling pressure. However, with the current lack of retail interest in the market, it is unlikely that the demand zone will be able to offer any support.

If DOGE closes below this area, losses could extend to $ 0.087 or even $ 0.065, before a bullish response is seen.

Reasoning

It was not surprising to see some weak observations in the DOGE indicators. The candles traded below their EMA tapes and this attracted more sell signals in the market. The tapes also showed some crossovers in recent days and signaled the start of a downtrend.

Also, the RSI and Awesome Oscillator moved in bearish zones. Ergo, the selling pressure can be expected to outweigh any chance of a bullish revival.

conclusion

Based on the aforementioned factors, Dogecoin can be expected to trend downward in the coming weeks. Levels like $ 0.087 and $ 0.065 could even become a reality if losses are not contained between $ 0.155 and $ 0.175.

For the bulls, an ideal opportunity to buy DOGE would be within the demand zone mentioned above. However, longing for DOGE at any price level carries many risks. Taking short calls would be the way to go right now.

This is a machine translation of our English version.

TAMMY SEWELL

Tammy Sewell is our Writer and Social at OICanadian.com. Tammy loves sports, she writes our celebrities news. She spends time browsing through several celebs news sources as well the Instagram. Email: Tammy@oicanadian.com Phone: +1 513-209-1700

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