Assessing Dogecoin traders’ next steps if memecoin’s price breaks THIS way

  • After falling below the $0.11 baseline, Dogecoin approached an important support range
  • DOGE’s open interest decline exceeded the daily loss, implying weakening bearish momentum

Dogecoin’s [DOGE] reversal from the $0.22 resistance level in May this year set the stage for the bears to dominate the market. They provoked a streak of red candles as the memecoin fell below its 20-day and 50-day EMA amid this bear run.

As predicted in our previous article, DOGE further succumbed to the bearish pressure and fell below the crucial $0.12 support level. A potential reversal from the immediate support range at $0.096-0.01 can stop the bleeding as bulls strive to make a comeback.

At the time of writing, DOGE was trading at around $0.101.

Will Dogecoin bears continue to put pressure?

1Binance Spot DOGEUSDT 2024 07 05 22 29 12

Source: TradingView, DOGE/USDT

The bearish pressure has been quite dominant since the price action reversed from the $0.22-resistance mark. The memecoin lost over 54% of its value over the last three months amid this bearish pressure.

During this downturn, the memecoin chalked out a classic descending triangle structure on the daily chart. After testing the $0.129-level for over three months, the bears finally provoked a streak of red candles below that baseline and confirmed a bearish pattern breakout.

The bulls retested this level soon after this breakout, but the 20 EMA resisted this rally as the altcoin continued its downtrend and approached the crucial $0.01-$0.096 support range at press time.

Going forward, this range is crucial to stopping immediate bleeding. In fact, an analysis of the visible range volume profile revealed that the prevailing price was at the brink of a relatively high liquidity zone. This would mean that bears would likely find resistance from bulls for further pulldowns.

As a result, any reversal from the current support range can help bulls retest the $0.11-$0.12 range. Should the price find a rally above the 20 EMA, it will likely enter a low-volatility zone.

On the flip side, any decline below the immediate support range can expose the memecoin to a rather extended decline towards the $0.08 zone.

The Relative Strength Index (RSI) continued to sway in the oversold territory at press time. Any likely reversal from the press time position will confirm the bullish reversal bias.

Open Interest declined

Screenshot 2024 07 05 at 10.27.35 PMScreenshot 2024 07 05 at 10.27.35 PM

Source: Coinglass

As per Coinglass data, DOGE’s open interest dipped by nearly 12% over the past 24 hours. However, the price action fell by around 4% during this time, which implied a lack of conviction or uncertainty among traders.

Such a scenario often points to either a potential reversal or consolidation phase— One where the market might stabilize before making the next move.

Next: More losses incoming for BNB’s price? Maybe not, only if…

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