Dogecoin Price Analysis: DOGE Prepares for Recovery After Intense Selloff to $0.22
- Dogecoin's dramatic drop continued to $0.22 amid Wednesday's crypto bloodbath.
- DOGE reclaims position in the descending parallel channel, welcoming a bullish outlook.
Dogecoin suffered another blow in the hands of the bears on Wednesday. The highly volatile cryptocurrency market saw over $500 billion wiped off. Major cryptocurrencies such as Bitcoin, Ethereum, and Ripple led the selloff.
The meme coin extended the flash drop under the descending parallel channel discussed severally. Support at $0.35 and $0.25 tried but failed to stop the bearish advances. However, the buyer congestion at $0.22 stopped the gravitational force, allowing bulls to take the mantle.
Dogecoin reclaims key support at $0.35
Dogecoin is trading at $0.36 at the time of writing. Bulls seem to be back in control, especially now that the price is back in the descending parallel channel. The channel's middle boundary caps the immediate upside. Amidst the recovery, some delays should be expected at the 200 Simple Moving Average (SMA) and the immense seller congestion at $0.5 as highlighted by the 50 SMA and the 100 SMA.
DOGE/USD four-hour chart
A comprehensive look at the short-term technical indicators shows that buyers are beginning to have the upper hand. For instance, the Relative Strength Index (RSI) has rebounded from the oversold area and points toward the midline. If the movement continues without any deterrents, more buyers will enter the market for gains eyeing $0.5.
Simultaneously, the Moving Average Convergence Divergence (MACD), which follows the general trend direction and measures its momentum, has slowed down the downtrend, showing signs of recovery. Traders should watch out for the MACD line (blue) cross above the signal line to validate the uptrend.
IntoTheBlock's IOMAP on-chain metric reveals the absence of robust resistance zones that could hinder or sabotage the recovery. In other words, Dogecoin's path with the slightest hurdles is upward.
Dogecoin IOMAP chart
On the downside, Dogecoin sits on top of an immensely buyer concentrated zone, running from $0.347 to $0.357. Here, nearly 38,000 addresses bought 5 billion DOGE. The robust support has been reinforced by investors who preferred to buy at a lower price during the dip. Therefore, Dogecoin's downside is firmly secured.