- Dogecoin formed a sell signal after the 20-day EMA converged with the 100-day EMA, which depicts a weakening short-term trend.
- Whales could also profit after two large addresses moved $56M worth of DOGE to Robinhood.
As a seasoned analyst with over a decade of experience in the cryptocurrency market, I must say that Dogecoin [DOGE] is currently showing some bearish trends that could potentially lead to more dips. The convergence of the 20-day EMA and the 100-day EMA on its four-hour chart suggests a weakening short-term trend, and if the 20-day EMA falls below $0.41 and moves below the longer-term moving average, it will confirm this sell signal.
Currently, Dogecoin (DOGE) is experiencing a decline following its impressive surge which took its value to over $0.48, a level not seen for several years. At the moment of writing, the most popular meme coin was being exchanged at around $0.39, representing a 3.49% decrease in the last 24 hours.
In simpler terms, the price of Dogecoin seems to be heading downwards based on its four-hour chart analysis. Currently, it’s trading below its 20-day, 50-day, and 100-day moving averages, which typically indicates a bearish or downward trend in the short term.
A crucial support level lies at the 200-day EMA ($0.34). If Dogecoin falls below this price, the long-term trend could also flip negative.
On the lower timeframe, a potential sell signal was starting to appear as the 20-day Exponential Moving Average (EMA) approached the 100-day EMA. If the 20-day EMA drops below $0.41 and dips beneath the longer-term moving average, this will validate the sell signal, leading to a possible price decrease.
In simpler terms, the Chaikin Money Flow (CMF) indicated that sellers had already started being active, as the CMF value was -0.02.
Should Dogecoin’s downward trajectory persist with sellers taking control, there’s a possibility it might drop to the 1.618 Fibonacci ratio level, which is approximately $0.29.
Instead, it’s worth noting that a significant resistance point might be found at the 0.5 Fibonacci level, approximately $0.42. This level also coincides with the 50-day Exponential Moving Average (EMA). If buying interest is drawn to this dip, DOGE could potentially overcome this level and resume its upward trajectory.
Are Dogecoin whales taking profits?
According to information provided by Whale Alert, on December 10th, two large DOGE token holders moved approximately 146 million tokens, worth over $56.42 million, to the Robinhood platform. This action may suggest a potential plan to sell these tokens.
According to AMBCrypto’s report, there was a significant increase in large Dogecoin investors (whales) buying the memecoin last month, which had an impact on its short-term price fluctuations.
If whales continue to offload their purchased whale tokens at the current pace, Dogecoin (DOGE) may erase its recent price increases.
Speculative interest wanes
On December 9th, the total value of open positions for Dogecoin (Dogecoin’s Open Interest) hit a record high of $4.45 billion. This significant spike occurred due to a nearly threefold increase in just under one month, as the buzz and speculation surrounding this popular meme-based cryptocurrency escalated.
Over the past two days, the value of OI has decreased significantly, falling from approximately $4.45 billion down to $2.95 billion at this moment.
As a crypto investor, I’ve noticed a decrease in the Open Interest (OI) for Dogecoin, suggesting that traders are liquidating their positions. This reduction in market activity is also reflected in the derivative trading volumes, which have dropped by 34% to approximately $14.23 billion at this moment, according to Coinglass.
The change in public opinion in the derivatives market might lead to a decrease in Dogecoin’s price fluctuations, potentially causing the coin to stabilize.
Market sentiment is bearish
The pessimistic indicators regarding Dogecoin have noticeably affected the general outlook towards it, according to Market Prophit. Currently, both the public’s and sophisticated investors’ sentiments towards DOGE lean towards pessimism, suggesting that they expect more price drops in the near future.
Read Dogecoin [DOGE] Price Prediction 2024-2025
If the market sentiment remains dull, it could inhibit buying activity, resulting in more dips for DOGE.
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2024-12-11 13:44