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- Retracement below 78.6% meant that Dogecoin could be traded within a range
- Long positions have been blown up en masse in December, so bulls need to be cautious
Bitcoin had a quiet couple of days as volatility died down over the weekend. It could come back with a vengeance on Monday. Stock indices such as the S&P 500 were bearish in the past week, and December 19 could set the trend for next week.
Read Dogecoins [DOGE] Price prediction 2023-24
Dogecoin fell back to a support region of $0.072 and saw a 4% bounce in the last two days, but open interest was weak.. However, it still faced resistance at $0.08, a level that has been significant for the past month. Can bulls regain this level and push higher?
A bullish order block saves Dogecoin, but this may be nothing more than a temporary respite
Based on the late November move from $0.071 to $0.119, a set of Fibonacci retracement levels (yellow) were drawn. At the time of writing, the price has fallen below the 78.6% retracement level. It met bullish order block, highlighted in cyan, above the $0.072 support level.
The almost complete retracement meant that Dogecoin was probably trading within a range and was not in a strong trend. The Relative Strength Index (RSI) fluctuated from strongly bullish to strongly bearish momentum even though the DOGE has not shown a long-term trend since mid-November. On-Balance Volume (OBV) also dipped below a support level from late November.
Together, they suggested that the sellers were dominant. A daily session close below $0.071 is likely to initiate a leg down for DOGE. However, brave bulls may look to bid on the asset within this zone.
The $0.8 level was turned into support before the rise to $0.119 a couple of weeks ago. As a horizontal level as well as a Fibonacci retracement level, it had significance. A retest as support in the coming days could offer a buying opportunity. Take-profit targets will be the bearish breaker at $0.091, and $0.11 highs. Below $0.072 lies the next support level at $0.065.
Open Interest saw a slight uptick over the weekend and the funding rate remained positive
Since the beginning of December, Dogecoin has seen an increase with a sharp price drop. These were accompanied by the liquidation of long positions worth millions of dollars. Throughout the decline from $0.119 on December 5th to $0.075 on December 16th, Open Interest also saw a decline.
This indicated that long positions were discouraged. The funding rate remained in positive territory, which also showed that the majority of the market did not start piling up short positions.