Dogecoin’s Gloomy Forecast: Price May Fall Further
In A Nutshell
Recent analysis indicates a pessimistic outlook for Dogecoin (DOGE), suggesting a potential further decline in its price. With the cryptocurrency experiencing a bearish trend on higher timeframes, the possibility of prices gravitating towards lower liquidity zones before any significant reversal occurs is becoming increasingly likely. This insight follows Dogecoin’s 20% price recovery after touching a low, which, while initially promising, might not sustain due to weak buyer momentum.
The Current Bearish Landscape of Dogecoin
Dogecoin’s market structure remains bearish, having dipped below its March lows and nullified gains from late that month. The immediate demand zone is identified between $0.0775 and $0.082, a critical area of consolidation prior to the surge in February and March. With the daily Relative Strength Index (RSI) positioned below the neutral 50 mark, the prevailing trend is undeniably bearish. Meanwhile, the Chaikin Money Flow (CMF) index barely over zero suggests minimal capital inflow, hinting at insufficient buying power to overturn the recent downturns.
Liquidity Analysis and Price Prediction
A six-month retrospective analysis reveals three significant liquidity bands within the $0.1-$0.112 range, all of which were eliminated last week, causing Dogecoin to rebound and test this range as resistance. The next notable liquidity zone lies between $0.0745 and $0.079, drawing DOGE closer due to current market trends and its vicinity. Should this zone be breached, Dogecoin could potentially reverse its trend and aim for the $0.18 mark. However, the prediction leans towards a bearish bias unless Dogecoin can ascend past $0.13 and maintain it as support.
Our Take
The analysis presents a cautious outlook for Dogecoin in the near term. Despite a recent recovery, the underlying weaknesses in buying strength and a bearish market structure suggest that DOGE may face further challenges ahead. The liquidity analysis points to potential lower targets before any bullish reversal can be expected. Investors and traders should keep a close eye on key resistance and support levels, as these will be crucial in determining Dogecoin’s directional momentum. Ultimately, navigating the volatile cryptocurrency market requires a balanced approach, combining technical analysis with up-to-date market insights to make informed decisions.
Sources
– TradingView
– Hyblock
