Dogecoin [DOGE] managed to defend the $0.088 support level despite the heavy selling pressure the memecoin faced recently. It is likely that the Bitcoin [BTC] bounce from $67k helped shore up the memecoin market sentiment.
AMBCrypto reported that DOGE and other memecoins saw heightened social media engagement. It came alongside a high liquidation imbalance and renewed speculative interest lately.
Assessing the Dogecoin bounce
The long-term trend remained bearish, despite the 15% bounce in five days. The revival at the $0.088 support level, which has been critical over the past month, meant DOGE could climb beyond $0.1 once again.
The Moving Averages remained bearish and could act as resistance to DOGE’s rally. The volume indicators also underlined seller dominance.
The A/D indicator continued to trend downward despite the bounce. At press time, the CMF was at -0.1 to show significant capital outflow in this timeframe, further cementing the long-term bearishness.
Meanwhile, the DMI had been showing a downtrend in progress, but this got messier toward the end of February. In the past two weeks, the indicator did not give a clear reading. This gave some faint hope of a trend shift.
Local highs to pull prices higher
The 1-month liquidation heatmap pointed out that the $0.10-$0.11 area had a cluster of short liquidations that could pull Dogecoin prices higher. These short liquidations have built up over the past two weeks as DOGE prices made lower highs during the downtrend.
A liquidity sweep to $0.11 may be brewing. However, it won’t break the longer-term downtrend. To do that, the rally must extend beyond $0.127.
At the time of writing, the local lower high at $0.1 was about to be overcome. The trading volume has been high, showing short-term demand behind the rally. This opened up the possibility of a range formation between $0.088 and $0.105.
Final Summary
- Even though the short-term DOGE momentum was bullish, traders should be cautious of the longer-term downtrend.
- The $0.105-$0.11 area had a cluster of short liquidations that could be swept before the next bearish reversal.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.