Disclaimer: The information presented does not constitute financial, investment, trading or other types of advice and is solely the opinion of the author
- The market structure turned bearish recently
- Momentum was well on the side of the bears
Since December 5th, the USDT (Tether) Dominance metric has risen from 7.94% to 8.26%, an increase of almost 4%. This showed market participants fleeing from holding crypto to holding stablecoins. Dogecoin hit a local high on December 5 at $0.1119.
Read Dogecoins [DOGE] Price prediction 2023-24
Over the next week, the idea of another drop was supported by the price action as well as the technical indicators. If Bitcoin also sees weakness over the next few days, fear could grip the market and Dogecoin could hit November lows.
Dogecoin presents the possibility of a bearish move, traders can wait for the trigger to enter positions
The red box at $0.089 highlighted a bullish order block formed on November 26. It was tested on November 28 and saw a strong bullish reaction from the DOGE. The price rose to $0.11, a move that measured nearly 22%.
In the last couple of days of trading, Dogecoin has fallen below the $0.094 support level and retested the order block. However, Candlewick at $0.085 in recent hours was not an encouraging sign. It indicated that bulls may have lost the battle.
Over the next day or two, a move below $0.0888, followed by a retest of the $0.089 area could offer a selling opportunity. The previously bullish order block would have turned into a bearish breaker. Sellers can take profit at $0.083 and $0.073. Meanwhile, invalidating this bearish notion would be a retracement above $0.09.
This trade was relatively low risk. The Relative Strength Index’s (RSI) drop below neutral 50 recently indicated that a downward move was a possibility. On-Balance Volume (OBV) also gradually declined over the past week.
The dormant circulation metric saw sharp spikes on November 10 and July 21. Both times the peak was chronologically close to a major price movement on Dogecoin. Since the November peak, however, another new one appeared, although DOGE recorded heavy losses in recent days.
The 30-day market value to realized value (MVRV) was a more reliable indicator of local peaks in recent months. The climb past the 10% mark has occurred three times since July and was followed by a steep price drop all three times. At press time, MVRV was back in negative territory, but this may not indicate the end of a short-term downtrend.
A retest of the bearish breaker, if it occurs, could be a trigger for short sellers. News in the broader economic sphere and global indices may also have an impact on the performance of the crypto market over the next two weeks.