DOGE price holds calmly and firmly above its long-standing major support at $0.06 while investors nurse their wounds in the wake of the sell-off on Monday. The most prominent meme coin, boasting $8.8 billion in market capitalization is up 1.2% to $0.063 on Tuesday.
Dogecoin and most of the crypto market, especially Bitcoin and the top altcoins, have come under heavy selling pressure, with investors seeming disinterested in the usual buy-the-dip narratives due to fears that more losses are likely before the crypto market begins the run into the 2024/2025 bull market.
BTC price, as previously mentioned, risks bowing to another sell-off below $25,000 before it can make its bullish case above $30,000.
As for Dogecoin, support at $0.06 is playing a critical role in the ongoing stability and must be defended at all costs. Otherwise, trading below this level might push DOGE price into an extended downtrend targeting $0.044 and $0.04 areas, respectively.
Navigating DOGE Price Weakening Market Structure
Dogecoin sits below all three major moving averages, starting with the 50-day EMA (red), the 100-day EMA (blue) and the 200-day EMA (purple). This position implies that DOGE price is vulnerable to declines unless buyers ignore the entire crypto environment (currently in shambles) to gain ground above the moving averages and most importantly the resistance at $0.07.
As seen on the chart, Dogecoin’s movements have since October’s run-up to $0.16, been confined below a descending channel, which bulls must break to make significant headway to the psychological resistance at $0.2.
The technical outlook in shorter timeframes like the four-hour chart foreshadows a 7% fall if a bearish rectangle pattern confirms a breakout.
Dogecoin holds in a precarious position, where movement below the rectangle lower limit at $0.0614 may add credence to the fears around losses extending beneath $0.06 and exacerbating the potential dip to $0.044 and $0.04 buyer congestion and liquidity zones.
It’s Not Over For DOGE Bulls
A recovery is likely to follow the ongoing consolidation above support at $0.06 based on the uptrend in the Money Flow Index (MFI).
The (MFI) tracks the amount and direction of money flowing into and out of DOGE markets over some time. It combines both price and volume data to measure the buying and selling pressure on an asset.
An uptrend in the MFI indicates that more money is flowing into Dogecoin markets than out, which could signal a bullish trend or a potential price reversal first to $0.07 and later above the channel on its way past $0.1.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
