Dogecoin Struggles for Uptrend as Market Sentiment Fades

29 April 2024

in DOGE

Reading Time: 5 mins read

Dogecoin Struggles for Uptrend as Market Sentiment Fades

In the shifting landscape of cryptocurrency, Dogecoin (DOGE) remains at a crossroads,, with recent price action showing consolidation around the $0.14 mark. This level has acted as a stronghold for the meme-based cryptocurrency, halting a five-day consecutive price decline and igniting a spark of hope for a bullish reversal. However, the broader market’s slowdown and a noticeable bearish trend on Dogecoin’s chart raise questions about the sustainability of this support.

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Dogecoin (DOGE) technical analysis shows a tightrope walk above critical support of $0.14.On the 4-hour timeframe, Dogecoin (DOGE) presents a cautious narrative, trading $0.1405.The meme coin’s DOGEripce trajectory has been wobbly, with recent actions underscoring a tug-of-war between bears and bulls.

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DOGE is currently lingering above the $0.14 mark, a level of significant support. The chart indicates immediate resistance near the exponential moving averages (EMA) at $0.156 and $0.168. A bullish resurgence could face hurdles at these EMAs, with $0.18 acting as a potential ceiling to any upward movements.

The Relative Strength Index (RSI) hovers around the 50 level, hinting at a delicate balance in market sentiment. Similarly, the Moving Average Convergence Divergence (MACD) shows a mix of bullish and bearish signals, leaving the next direction somewhat uncertain. Presently, the MACD line is hovering just above the signal line, suggesting a slight bullish momentum, yet the proximity warns of a possible crossover.

Bearish Sentiment Not Fully Averted, as Bearish Indicators Loom Over DOGE

With DOGE’s price struggle to climb above the short-term EMAs, the bearish shadow hasn’t fully receded. The next major support zone stands near $0.129, a level that might come into play if the price slips below the $0.14 foothold. For Dogecoin bulls, overcoming the resistance at the EMAs is critical to reversing the recent downtrend. A firm break above these moving averages could pivot the focus to higher resistances, with $0.18 and $0.22 serving as the subsequent targets for an optimistic rally.

Technical indicators on Dogecoin’s 4-hour chart reveal a bearish undertone. A death cross, where the 20 Exponential Moving Average (EMA) crossed below the 50 EMA, has cemented a bearish sentiment. This setup suggests that DOGE may be on the brink of further corrections, with the Fibonacci retracement levels indicating the next critical support at $0.12—the golden ratio.

A dip below the $0.12 threshold could spell a significant downturn towards the $0.10 mark. Conversely, a strong defense of this level could prompt a rally towards $0.16, reinstating bullish hopes. Currently, the majority of Dogecoin’s supply remains profitable, which, while positive, introduces the risk of profit-taking that could drive the price down, especially in a stagnating bullish momentum.

On-Chain Data Reflects Cooling Momentum

On-chain metrics from Santiment disclose a notable spike in the Mean Coin Age (MCA), indicating that older coins are moving, possibly translating to increased selling pressure. This activity contrasts with an increasing coin price, which would typically see a decrease in MCA as new coins are accumulated and stored.

With an 83.65% price increase in Dogecoin over the past 90 days, investors may find themselves at a juncture where profit booking could override the desire to hold, exacerbating the downward pressure on DOGE’s price. Any significant profit-taking could push Dogecoin’s price beneath the $0.12 mark and alter the current profit distribution, shifting market dynamics further.

As DOGE trades with a cautious outlook, the market remains attentive to both the $0.14 support and the pivotal $0.12 level. Should the latter be breached, it could signify a turn towards a deeper bearish phase, while sustaining above it could help DOGE regain some of its lost momentum.