Dogecoin has seen a 6.8% price increase, pushing 73% of its holders into profitability. Despite this short-term gain, the broader trend for Dogecoin remains bearish, with key resistance at $0.1120 and support at $0.1.
Dogecoin Rides Bitcoin’s Wave, Tests Major Resistance
In the past 24 hours, Dogecoin's price surged, following Bitcoin’s climb above the critical $60,000 psychological barrier. While the market has turned green, the Bitcoin Fear and Greed Index indicates that many investors remain cautious. This caution may stem from the formation of a rising wedge pattern across several cryptocurrencies, including Dogecoin—a pattern that typically signals a bearish reversal. However, in the short term, Dogecoin’s price action looks promising.
Currently, Dogecoin is experiencing a short-term upward trend within a larger downward pattern. Although the price has been making higher lows, it remains below both the 50-day EMA ($0.10133) and the 200-day EMA ($0.11216), underscoring the broader bearish sentiment.
Dogecoin’s price is now testing resistance in the $0.1100–$0.1120 range, near the 200 EMA. If it breaks above this level, the next major resistance is around $0.1200, aligning with previous price action. Immediate support lies at $0.1, near the 50 EMA, with a more substantial support level at $0.08, matching a previous low.
Technical Indicators Point to Potential Reversal
The recent price movement has formed a rising wedge pattern, a bearish reversal indicator. If Dogecoin breaks below this wedge, it could signal a downward move. The 50 EMA is trending downward, and the price is struggling to surpass the 200 EMA, reinforcing a bearish outlook. The Relative Strength Index (RSI) stands at 65.31, approaching overbought territory. A decline in the RSI could indicate a potential price reversal.
The Chaikin Money Flow (CMF) is neutral at 0.01, indicating a balanced money flow without strong buying pressure to sustain the upward trend. Additionally, the recent price increase was accompanied by lower trading volume, a divergence that often signals weakening momentum and suggests the current rally may not be sustainable.
Despite these bearish signs, the recent Dogecoin Core upgrade to version 1.14.8, which aims to improve stability, efficiency, and security, may have a positive long-term impact on the price.
On-Chain Metrics and Market Sentiment
On-chain analytics from Coinalyze show that DOGE open interest increased by 7.48% in the last 24 hours, signaling a potential continuation of the short-term upward trend. Additionally, the number of large Dogecoin transactions has risen, indicating that whales are accumulating DOGE. These large players significantly influence price movements due to their substantial liquidity.
The recent price increase has pushed 73% of Dogecoin holders into profit, a bullish indicator that signals to potential investors that buying Dogecoin can be profitable. This profitability has also led to 67% of investors becoming long-term holders, a positive metric that can instill confidence in new investors and further drive the price upward.
In summary, while Dogecoin shows short-term strength and increasing profitability among holders, caution is warranted due to underlying bearish patterns and market conditions.
Notice:
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