Dogecoin Price Analysis: DOGE Uptrend Challenged At $0.2

Last Updated July 23rd 2021
2 Min Read
  • Dogecoin price locked between two critical levels’ the 200 SMA resistance and the confluence support at $0.182.
    • DOGE’s relatively unchanged on-chain activity suggests that recovery will not be easily sustainable in the short term.
    • The transaction history model affirms support at $0.19 which may bolster Dogecoin above $0.2.

    Dogecoin rallied massively after the drop to $1.6 on Tuesday. The bullish comeback was triggered by a technical reaction to the selloff but was later accentuated by Elon Musk’s appearance at the B Conference.

    The meme coin stepped above $0.2 but hit a barrier marginally under $0.22. A correction ensued almost immediately, with losses gaining traction below $0.2. The 200 Simple Moving Average (SMA) also contributed to the overhead pressure. Meanwhile, Dogecoin is trading at $0.19 while bulls seek higher support.

    Dogecoin Price Recovery Is A Daunting Task

    The Relative Strength Index (RSI) seems to be extended the retreat from the oversold area. As the RSI oscillates in the direction of the DOGE’s trend, it also measures the strength of the bulls and bears. A sharp drop such as the one in the chart shows that bears have the upper hand. As the aggressiveness soars, Dogecoin is expected to keeping dropping to explore levels toward $0.16.

    Conversely, confluence support at $0.182 will ensure that the bearish leg does not stretch further. Note that this support is created by the 100 SMA and the 50 SMA.

    DOGE/USD two-hour chart

    DOGE/USD 2-hour chart 072321

    As Dogecoin started climbing from the support at $0.16, a golden cross formed within the four-hour chart. This technical pattern developed the moment the 50 moving average crossed above the 100-day moving average. Some of the most prominent technical analysts in the industry see this pattern as one of the most definitive buy signals that could start a bull run.

    The last time these moving averages formed a golden cross on Dogecoin’s four-hour chart was in late June. Following this bullish formation, the meme coin surged by 13%. A similar scenario could be about to take place as support is established above $0.2.

    Robust support has also been heightened between $0.186 and $0.192 by the IOMAP on-chain model. According to the IntoTheBlock, this metric tracks the addresses that have previously bought DOGE and groups them in bands alongside the volume pulled. With these ranges, traders can identify support and resistance zones.

    Dogecoin IOMAP chart

    DOGE/USD volume chart 072321

    For instance, 38,000 addresses previously bought 6.5 billion DOGE in the above range. This is robust support that may be the beginning of another leg up toward $0.3. On the upside, the absence of immense resistances zones adds credence to the bullish outlook.

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