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 good points. One such rally for DOGE previously month, when DOGE climbed almost 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 all the time has a robust influence on the efficiency of altcoins. Dogecoin and comparable meme cash tend of popping off close to the top of a Bitcoin rally and crash tougher 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 value motion, a transfer to $0.07 appeared believable.
The liquidity within the $0.06 pocket might be examined by one other wick downward, however as long as the worth doesn’t shut a each day session under $0.057, there was an opportunity of a transfer upward.
This concept good points some credibility once we contemplate the truth that July and an excellent 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 have the ability to collect the impetus for a transfer upward.
Rationale
Supply: DOGE/USDT on TradingView
The indications confirmed some bearish bias for DOGE. The Relative Power Index (RSI) slipped beneath impartial 50 previously two weeks, to spotlight bearish momentum on the each day timeframe.
The On-Steadiness Quantity (OBV) didn’t see a pointy drop. In actual fact, the OBV additionally stood at a degree of assist that has been revered previously few months. The Chaikin Cash Circulate (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. Dropping this degree may see DOGE drop swiftly to the $0.048-$0.05 zone.
This downward transfer hinges on Bitcoin falling on the worth charts. The $19.2k-$19.6k is a area BTC bulls would need to see defended.
