- DOGE rebounded by +30% and could tap an extra 18%
Investors have de-risked from DOGE, exposing price to more pressure
As a seasoned analyst with over two decades of experience in the crypto market, I’ve seen my fair share of bull runs and bear markets. The recent DOGE rebound has caught my attention, but I must admit I’m still a bit skeptical about its longevity.
The price of Dogecoin (DOGE) has encountered considerable stress since reaching its annual peak of $0.22 in March. Consequently, this recent market downturn caused it to plummet to levels reminiscent of early 2024, around $0.8. This decline added an additional 40% loss as depicted on the price charts.
Just as other markets, Dogecoin (DOGE) has seen a significant recovery, with gains exceeding 30%. It has also managed to reclaim a pivotal resistance and a mid-range level within its descending channel. This leads us to ponder – Could bulls be poised for further recovery growth?
Can DOGE’s upswing continue?
Doge bulls robustly guarded the lower boundary of the channel at $0.8, evident in the elongated candlestick wick. Yet, the critical advantage for further growth at the given moment seemed to be shifting towards maintaining the mid-range as a base of support instead.
At the moment, the mid-level has been successfully regained and fortified. This might encourage DOGE to focus on its next potential bullish point and approach the resistance level at approximately $0.12. If this happens, it would represent a 18% increase in recovery value.
However, key price chart indicators didn’t support the aforementioned bullish thesis, at least not at press time.
In historical trends, when DOGE‘s price surpassed its mid-range, both the Relative Strength Index (RSI) indicating demand and the Chaikin Money Flow (CMF) suggesting inflows tended to be above or close to their average levels.
An extra pump would only be feasible if demand and inflows surged too.
DOGE: Investors de-risk as outflows surge
Thus far, according to data from Coinglass, Dogecoin (DOGE) has experienced approximately $60 million in withdrawals this week due to investors adopting a more cautious stance amidst the recent market turmoil. However, these outflows seem to have lessened towards the end of the week, implying that a potential shift in trend could be on the horizon.
While it’s possible for DOGE to experience a significant price surge that might allow it to surpass its general downward trend, this upward momentum could potentially take some time to materialize.
The weak momentum was likely because of the declining Open Interest (OI) rates.
Read Dogecoin Price Prediction 2024-2025
Doge’s Overall Investment (OI) decreased significantly, falling from approximately $2 billion in March to less than $500 million currently. This indicates that there has been little additional liquidity introduced into derivatives to stimulate the memecoin and potentially reverse its current downward trend.
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2024-08-11 00:07