- Dogecoin’s market structure favors sellers, indicating a possible full retracement of recent losses.
- Despite the lack of bullish sentiment in the Open Interest, Dogecoin’s price action suggests a potential move higher.
Dogecoin traders might be preparing for a roller-coaster ride as the market structure reveals a strong tilt towards sellers. Although the Open Interest doesn’t exhibit bullish sentiment, Dogecoin’s price action indicates an impending upward surge.
Following a brief decline to $24.8k on June 15th, Bitcoin [BTC] found temporary relief around the $25k mark, with prices rebounding and peaking at $26.6k over the weekend. Despite the presence of formidable resistance levels overhead and a less than bullish market sentiment, Bitcoin may witness a minor upward shift to gather liquidity. As a result, altcoins such as Dogecoin could tag along, potentially leading to a bearish reversal. However, traders should also brace for a possible rally.
Dogecoin’s trading volume over the past week has been relatively low compared to the shift that drove prices below the $0.07 support level. This low volume suggests that market participants are indecisive, waiting for a definitive direction or news to stimulate price movement. Thus, initiating trade positions under these conditions could entail a higher risk.
The Fibonacci retracement levels outline the 50%, 61.8%, and 78.6% retracement levels as potent resistance zones. Yet, considering Bitcoin’s short-term structure indicating some potential upside, sellers should tread cautiously. A move back to the $0.072 level, or slightly higher to flush out early short sellers before a resumption of the downtrend, seems likely.
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The Chaikin Money Flow demonstrates a substantial capital inflow over the past three days, with a reading above +0.05. The Awesome Oscillator also ascends above the 0 level, suggesting a glimmer of bullish momentum. Risk-averse traders might prefer to wait until DOGE establishes Monday’s high to gain insights into market sentiment.
The falling Cumulative Volume Delta (CVD) supports the bearish narrative, demonstrating strong seller dominance over the past week. The Open Interest, which increased by nearly $28 million between June 15 and 17 when Dogecoin rebounded from $0.059 to $0.063, does not yet exhibit bullish sentiment. However, if DOGE makes a move toward $0.07, bulls are likely to jump on board, further stirring market volatility.
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