Is Dogecoin prepared to break out of its narrow trading range?
Dogecoin (DOGE) has been trading within a compact price range for the past three weeks, with a range low of $0.0632 and a range high of $0.0700. However, there are signs that a breakout is imminent, especially with Bitcoin experiencing a price correction. DOGE saw losses of 2.1% in the past 24 hours, suggesting a potential bearish breakout.
DOGE’s market structure has been bearish since early April, with a break below the key support level of $0.0632 on June 10. Although there was a bullish rebound, buyers have struggled to gain momentum due to selling pressure at the $0.0700 resistance level. This has kept DOGE within a compact price range, but on-chart indicators indicate the possibility of a bearish breakout.
The Relative Strength Index (RSI) has been below the neutral 50 level since July 5, indicating waning buying pressure. The On-Balance Volume (OBV) has remained mostly flat, which could be significant for bears. A successful bearish breakout could target the October 2022 low of $0.0582. On the other hand, if BTC rallies above $31k, bulls could surprise with a rally from the current support level.
Open Interest data suggests bearish sentiment in the market, as it has been on a downtrend since a sharp drop on July 5. This aligns with the RSI remaining below the neutral 50 level during the same period.
The Spot Cumulative Volume Delta (CVD) also saw a massive decline, indicating market sentiment favoring a bearish breakout for DOGE.
Overall, there are indications of a potential bearish breakout for DOGE, with selling pressure and lack of demand in the futures market. However, the outcome will depend on various factors such as Bitcoin’s performance and market sentiment. This information is solely the writer’s opinion and should not be considered financial advice.