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Dogecoin could withstand 16% drop ahead of next rally


Disclaimer: The conclusions of the following analysis are the sole opinions of the author and should not be construed as investment advice.

Dogecoin has had an appalling November so far. Wider market corrections have slowly eroded the value of DOGE by a total of 26% over the past 20 days. Candles now sit below their daily simple moving average lines of 20, 50 and 200 and face the weight of short selling.

While a potential bullish cross on the MACD may determine DOGE’s short-term price action, an area of ​​air resistance presented a major hurdle. At the time of this writing, DOGE was trading at $ 0.2327, up 0.5% in the past 24 hours.

Dogecoin Daily Chart

Source: DOGE / USD, TradingView

Considering that DOGE was trading below its 20 (red), 50 (yellow), and 200 (green) SMAs, short selling was a significant threat if another round of corrections took hold of the market within the meaning large. This would see DOGE move to the stronger support line of $ 0.1936 as it also hit the low value area.

Now the aforementioned support appears to be a safe area for DOGE. The same triggered an 80% increase in early August and a 40% jump in September. From there, the introduction of new longs would help start another rally.

To avoid a 16% drop in this reliable support, DOGE would need to kick off much of the selling pressure by recording a close above $ 0.242 to $ 0.272. This region coincided with the POC of the visible area as well as the aforementioned MAs. The next draw would be scheduled once DOGE marks the price cap of $ 0.297 and its high value area.

Reasoning

Given that the RSI was languishing in bearish territory, an immediate break above $ 0.272 is rather unlikely. The directional movement index also maintained a bearish outlook, with the -DI line continuing to trade above the + DI line. Some optimism has arisen from a potential bullish cross on the MACD, but DOGE would need stronger clues to face a major blockade to come.

Conclusion

Dogecoin needed to break above $ 0.242 to $ 0.272 to fall into a bullish bias. However, weak readings from the DMI and RSI have aligned a long-term bearish narrative for DOGE, despite the bullish outlook for the MACD.

Dogecoin will be better positioned for an increase once a 16% retracement pulls the price towards more reliable support at $ 0.193.


Tags : long term
Margarita W. Wilson

The author Margarita W. Wilson