CoinDesk Report:
Following a drop below the $0.11 baseline, Dogecoin approaches a critical support area. The open interest decline for DOGE has surpassed its daily loss, signaling a weakening bearish momentum.
Dogecoin reversed from its resistance at $0.22 in May, laying groundwork for a bear-dominated market. In this bearish trend, meme coins breaking below the 20-day and 50-day moving averages triggered a series of red candles.
As predicted in our previous article, DOGE further succumbed to bearish pressure, breaking below the key support level of $0.12. Amid efforts for a bullish resurgence, a potential reversal from the immediate support range of $0.096 to $0.01 could stem the bleeding.
At the time of writing, DOGE trades at approximately $0.101.
Will bearish pressure on Dogecoin persist?
Since reversing from the $0.22 resistance line, bearish pressure has maintained dominance. Under this pressure, meme coins have depreciated by over 54% in the past three months.
During this slump, a classic descending triangle pattern emerged on the daily chart for meme coins. After testing the $0.129 level for over three months, bears finally triggered a series of red candles below this benchmark, confirming a bearish breakout.
Shortly after this breakout, bulls retested this level during the bullish market but were resisted by the 20-day moving average. Altcoins continue their downtrend and approach the crucial support range of $0.01 to $0.096 at the time of publication.
Looking ahead, this range is crucial for immediate recovery. Analysis of visible range trading profiles indicates that current prices hover on the edge of a relatively high liquidity area, suggesting bears may encounter resistance from bulls.
Therefore, any reversal from the current support range could aid bulls in retesting the $0.11 to $0.12 range. A bounce above the 20-day moving average might lead to a low-volatility zone.
Conversely, any decline below the immediate support range could potentially drive meme coins towards the $0.08 range.
As of the time of writing, the Relative Strength Index (RSI) continues to fluctuate in oversold territory. Any potential reversal, from the standpoint of this report, would confirm a reversal towards a bullish market bias.
Unrealized interest declines
According to Coinglass data, DOGE’s open interest contracts dropped nearly 12% in the past 24 hours. However, during this period, the price decreased by approximately 4%, indicating traders’ lack of confidence or uncertainty.
Such conditions typically point towards a potential reversal or consolidation phase—indicating a potential stabilization of the market before the next move.
