Dogecoin recently broke above a key Relative Strength Index (RSI) level, which is a bullish sign. However, despite this bullish signal, several other indicators suggest that DOGE needs stronger momentum to consolidate gains or move higher.
Dogecoin Enters Key Fibonacci Levels
Currently, Dogecoin is trading at $0.108, down 1.77%, indicating a slight decline in the short term. The 50-day moving average (yellow) is at $0.1023, while the 200-day moving average (blue) is at $0.1371.
Trading below both moving averages suggests a long-term downtrend for Dogecoin.
The prominent key Fibonacci levels show the current price is around the 0% level ($0.11087), which acts as an immediate resistance.
The next key resistance is at the 23.6% retracement level at $0.11796, while support levels lie at $0.09230 (38.2% level) and $0.08084 (100% retracement level).
If Dogecoin can break the 50-day moving average and surpass the $0.11087 resistance, it could head towards the 23.6% retracement level at $0.11796.
A sustained move above this level would confirm a change in momentum, targeting the next resistance at $0.12943 (61.8% retracement). Overall, DOGE is in a consolidation phase and is likely to break above the current resistance levels with enough momentum.
Can Dogecoin Attract Enough Trading Volume?
Dogecoin's market capitalization is around $15.7 billion, according to data from CoinMarketCap. Over the past week, its price has increased by more than 2%, the lowest increase among the top memecoins.
Further analysis shows a trading volume of around $506 million at press time, with activity dropping over the past 24 hours.
While weekends typically see low trading volumes, Dogecoin would need a significant increase in volume to break above the next Fibonacci resistance level.
Active Locations Show Decline
Another important indicator that impacts Dogecoin’s potential for price appreciation is the number of daily active addresses. Despite recent attempts to boost the price, the number of daily active addresses does not reflect the same level of optimism.
The number has dropped slightly over the past three days. Data shows that the number of daily active addresses hovered around 45,000 on September 19 and 20. However, by September 21, the number had dropped to around 43,000.
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