Disclaimer: The findings of the next evaluation are the only real opinions of the author and shouldn’t be thought-about funding recommendation.
Dogecoin [DOGE] has been in a downtrend since November 2021. The downtrend has been interspersed with swift rallies of double-digit share features. One such rally for DOGE up to now month, when DOGE climbed practically 50% from the $0.059 low to succeed in the $0.087 excessive in August.
At press time, Dogecoin sat precariously in a requirement zone. The longer timeframe market construction was bearish for Dogecoin, and Bitcoin confirmed weak spot on the charts as effectively.
DOGE- 1-Day Chart
Supply: DOGE/USDT on TradingView
The motion of Bitcoin at all times has a robust influence on the efficiency of altcoins. Dogecoin and related meme cash generally tend of popping off close to the tip of a Bitcoin rally and crash more durable than Bitcoin.
This appeared to have occurred in mid-August when BTC’s transfer to $24k topped out however DOGE nonetheless had the stead to push from $0.07 to $0.085.
At press time, DOGE traded at $0.062 and was inside a zone of demand from July. Based mostly on worth motion, a transfer to $0.07 appeared believable.
The liquidity within the $0.06 pocket could be examined by one other wick downward, however as long as the value doesn’t shut a each day session beneath $0.057, there was an opportunity of a transfer upward.
This concept features some credibility once we take into account the truth that July and a superb a part of August noticed DOGE vary between $0.063 and $0.07.
But, Bitcoin faces stiff resistance at $20.4k and $20.8k. If BTC can climb previous these ranges, Dogecoin would possibly be capable to collect the impetus for a transfer upward.
Rationale
Supply: DOGE/USDT on TradingView
The indications confirmed some bearish bias for DOGE. The Relative Energy Index (RSI) slipped beneath impartial 50 up to now two weeks, to focus on bearish momentum on the each day timeframe.
The On-Stability Quantity (OBV) didn’t see a pointy drop. In truth, the OBV additionally stood at a degree of assist that has been revered up to now few months. The Chaikin Cash Circulation (CMF) has proven intense promoting stress all through August.
The Bollinger Band (BB) Width indicator was additionally on the rise. The indicator displays the latest surge in volatility following DOGE’s drop from $0.085.
Conclusion
If the OBV is unable to carry on to the assist degree within the subsequent week or two, DOGE is perhaps set to witness a pointy drop beneath $0.057. The $0.062 degree has been necessary in February and March of 2021. Shedding this degree may see DOGE drop swiftly to the $0.048-$0.05 zone.
This downward transfer hinges on Bitcoin falling on the value charts. The $19.2k-$19.6k is a area BTC bulls would wish to see defended.
