DOGE’s open interest has been falling, suggesting a decline in long and short positions in the market.
The RSI may need to beat the 44.95 zone to bounce off consolidation and peak toward 0.072.
If more selling pressure appears, then traders may look for an entry between 0.0573 and 0.0584.
In the last 30 days, Dogecoin (DOGE) has lost 11% of its value, mainly due to the widespread volatility that hit the market. As a result, the meme’s price sunk to a yearly low of $0.059 on June 10. However, the respite in the market helped the coin back up above $0.6
While DOGE has experienced periods of rapid price appreciation this year, its return to $0.1 might be more challenging. One of the key factors for this projection is the overall market sentiment and demand for DOGE.
According to the derivates information portal Coinglass, DOGE’s open interest has been decreasing since May.
Skipping the long and shorts
As a key indicator of the market commitment to a particular cryptocurrency, open interest is the number of open long or short contracts in the options or futures market. Oftentimes, increasing open interest means that more volume has entered the market.
But in DOGE’s case, the decline in the metric, alongside a falling price, indicates that traders are liquidating their position. Also, the increasing close in positions also acts as a confirmation that the current price trend may be ending.
Dogecoin Open Interest | Source: Coinglass
Before the June 10 sharp candle drop, the 4-hour DOGE/USD chart showed that the coin has been hovering around a tight trading range of $0.0671 (support) and $0.0714 (resistance).
The hike in resistance just before the drawdown was one of the stumbling blocks preventing bulls from heading to $0.072.
DOGE may bounce if this indicator rises
While DOGE has consolidated amid market revival, buying momentum has been with resistance on several occasions at $0.0626. So, if the bulls manage to change the direction of the RSI upward, we may see DOGE break the $0.0626 resistance.
DOGE/USD 4-Hour Chart | Source: TradingView
With steady demand and the RSI bounce from 35.50, DOGE could hit $0.0720, provided Bitcoin (BTC) and the broader market stabilizes.
However, by looking at the Fibonacci retracement level, the 4-hour chart showed that the 0.618 level was below the DOGE $0.616 price.
Therefore, if selling pressure outweighs buying pressure and the RSI retraces, then there could be a nominal pullback. Also, the region between 0.0573 and 0.0584 could serve as an entry point.
DOGE/USD 4-Hour Chart | Source: TradingView
Regardless of the next trend that DOGE follows, the previous week’s plunge has tremendously affected the portfolio of many holders. As of this writing, IntoTheBlock data revealed that 51.74% of the entire Dogecoin holders were at a loss.
Disclaimer: The views, opinions, and information shared in this price prediction are published in good faith. Readers must do their research and due diligence. Any action taken by the reader is strictly at their own risk. Coin Edition and its affiliates will not be liable for direct or indirect damage or loss.
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