While Dogecoin’s recent losses were on par with those of most top-ten-ranked cryptocurrencies, it’s important to understand its position, ahead of the September 7 sell-off. Before the crash, prices were slowly declining, after forming a peak of $ 0.35.
Even though the higher levels were ready to be taken, DOGE disappointed bullish watchers as prices fell back below $ 0.30 and the 23.6% Fiboancci level. Since retailers were less interested in the popular meme, DOGE had to exceed certain levels to attract more attention to its market. At the time of writing, DOGE was trading at $ 0.247, down 0.6% in the past 24 hours.
Dogecoin daily chart
A closer look at the DOGE chart indicated that prices moved within a descending channel even after the recent sell-off. The pattern generally sees a breakout to the upside, but there were chances of a breakout if buyers don’t adapt quickly. A close below the lower trend line could trigger another 11% slide towards a defensive area of $ 0.21. A decisive move below $ 0.232 would act as a precursor to such a result.
To deny this scenario, buyers would have to respond at the 200-SMA (green) and force a move north. The chances of a breakout to the upside will come to light when DOGE successfully closes above the average of its descending channel. From there, a close above $ 0.320 would allow the bulls to push higher.
Momentum was bearish-neutral on the Awesome Oscillator, a situation that has been intact for the past two weeks. Similarly, the RSI had not yet fully fallen into bearish territory and flattened between 40-45. However, since the candles are trading at the lower end of the Bollinger Bands, some short-term buying can be expected.
Considering the current dynamics of the DOGE market, low volumes and receding volatility could prove favorable. This would mitigate the chances of a large drawdown should DOGE close below its 200-SMA. On a positive note, given that prices were trading at a major support line and at the lower end of the Bollinger Bands, the chances of a collapse were slim. However, DOGE needed to rise above the September 6 high of $ 0.320 to attract bullish traders back to the market.
This is a machine translation of our English version.