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Dogecoin Price Uncertain Recovery Above $0.2 Leaves Investors In Limbo

Last Updated July 29th 2021
2 Min Read
  • Dogecoin has gained ground from $0.16, but its ability to hold above $0.2 remains shaky.
  • A daily close under $0.2, and by extension, the ascending channels’ lower channel may trigger losses toward $0.1
  • DOGE enjoys support at the 50 SMA and the 100 SMA, massaging the bulls’ ego for gains above $0.2.

Dogecoin lifted from the recently established support at $0.16. The uptrend was accentuated by the widespread bullish wave in addition to comments from the “Dogefather,” Elon Musk. According to the Tesla billionaire, “Dogecoin is money.”

A break above $0.2 occurred in tandem with Bitcoin’s upswing to $40,000 on Monday. Dogecoin stepped above $0.23 but failed to keep the momentum toward $0.24.

The correction that followed soon after saw DOGE retest the crucial level at $0.2. The bearish leg stretched to $0.195 before another recovery occurred. At the time of writing, the meme coin trades at $0.205 but appears to be having a challenging time sustaining the uptrend.

Why Dogecoin Price Recovery Remains In Jeopardy?

Dogecoin’s position above $0.2 is not etched in stone, especially with investors who appeared to be unbothered by comments from Elon Musk. From a technical perspective, the 200 Simple Moving Average (SMA) barrier makes the uptrend vulnerable to a correction.

Dogecoin depends on the immediate support fashioned to it by the ascending parallel pattern’s lower edge. Realize that closing the day beneath this area and $0.2 would call more sellers into the market and perhaps culminate in a downswing to $0.16 and $0.1, respectively.

DOGE/USD four-hour chart

 DOGE/USD 4-hour chart 072921

The Moving Average Convergence Divergence (MACD) indicator brings to light a bearish brewing impulse. Following the rejection from $0.23, the 12-day EMA crossed below the 26-day EMA, compelling more sellers to join the market. If this trend-following tool that calculates Dogecoin’s momentum crossed the mean line, the odds for a breakdown would significantly increase.

Another bearish indication emanates from the Relative Strength Index (RSI) amid a gradual retreat from the overbought region. Suppose the descending trend line drawn along the declining peaks is not broken. In that case, an RSI bearish divergence will affirm the bears’ grip on Dogecoin, further enhancing the uncertainty for holding above $0.2.

Meanwhile, it is essential to realize that Dogecoin is provided support at the 50 SMA and the 100 SMA on the four-hour chart. Therefore, a break under $0.2 could still secure higher support and perhaps restart the uptrend toward $0.3.

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