HomeNewsTrading Opportunities Unleashed: Dogecoin's Range Formation Signals Potential for Traders

Trading Opportunities Unleashed: Dogecoin’s Range Formation Signals Potential for Traders

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  • Dogecoin (DOGE) has formed a sideways structure on the four-hour chart, oscillating between key Fibonacci levels, which may provide trading opportunities.
  • Despite a weak Bitcoin (BTC) and a bearish market structure, the slight uptick in Open Interest (OI) could bring a glimmer of hope for the bulls.

As the crypto market continues to reveal its unpredictable nature, Dogecoin (DOGE) recently entered a sideways structure, following a significant drop on 10th June. This has resulted in the cryptocurrency oscillating within a key pocket framed by the 23.6% ($0.05779) and 50% ($0.06316) Fibonacci levels.

In a market context dominated by a weakened Bitcoin (BTC) below the $25,000 mark, DOGE’s continued sideways motion could potentially present shorting opportunities for traders. This sideways structure has been deduced from the placement of the Fibonacci retracement tool between a lower high registered on 5th June and a swing low on 10th June.

As of my analysis, DOGE’s price action is inching closer to the range high and the 50% Fibonacci level of $0.06316. Moreover, the overall four-hour market structure tends towards the bearish side, suggesting a potential price rejection that could push DOGE towards retesting the range low, or the 23.6% Fibonacci level of $0.05779.

Assuming this trajectory, an opportunity for shorting might emerge with an entry point at the 50% Fibonacci level, aiming for the 23.6% level. However, it’s important to note that a candlestick close above the 61.8% Fibonacci level ($0.06556) would contradict this bearish thesis, whereas a close above the lower high of $0.7333 could trigger a shift in the market structure towards a bullish bias.

The Relative Strength Index (RSI) and the Chaikin Money Flow (CMF), two widely used technical indicators, appear to be inclining. The CMF has already crossed its median zero level, indicating improved capital inflows. Conversely, the RSI remains below the 50-mark, signifying persistent selling pressure.

A further confirmation of this selling pressure comes from the declining Cumulative Volume Delta (CVD), which reflects a surge in selling volumes over recent days. Simultaneously, the Open Interest (OI)—a metric that measures the open contracts on the futures market—has shown a marginal increase from $186 million on 14th June to above $200 million at the moment. While this uptick in OI could infuse some optimism among bulls, the substantial decrease in CVD implies that sellers still hold firm control over DOGE’s current market scenario.

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AnnJoy Makena
AnnJoy Makenahttps://www.ethnews.com
Annjoy Makena is an accomplished and passionate writer who specializes in the fascinating world of cryptocurrencies. With a profound understanding of blockchain technology and its implications, she is dedicated to demystifying complex concepts and delivering valuable insights to her readers. Business Email: info@ethnews.com Phone: +49 160 92211628