by Disclaimer: The information presented does not constitute financial, investment, trading or other advice and represents the opinion of the author only.
- The retracement below 78.6% meant that Dogecoin could be trading in a range
- Long positions exploded en masse in December, so bulls should remain cautious
Bitcoin had a quiet few days as volatility died down over the weekend. He could come back strong on Monday. Stock indices such as the S&P 500 have been bearish for the past week, and December 19 could set the trend for next week.
Read Dogecoin [DOGE] Price Prediction 2023-24
Dogecoin fell back to a support region at $0.072 and rebounded 4% in the past two days, but open interest was weak. However, it still faced resistance at $0.08, a level that has been prominent over the past month. Can the bulls recover this level and push higher?
A bullish order block saves Dogecoin, but it could only be a temporary respite
Source: DOGE/USDT on TradingView
Based on the late November move from $0.071 to $0.119, a set of Fibonacci retracement levels (yellow) have been established. At the time of writing, the price has fallen below the 78.6% retracement level. It encountered a bullish order block, marked in cyan, above the $0.072 support level.
The almost full retracement meant that Dogecoin was likely trading in a range and not in a strong trend. The Relative Strength Index (RSI) has oscillated from strongly bullish to strongly bearish momentum, even though DOGE has not shown a longer-term trend since mid-November. The equilibrium volume (OBV) also fell below a support level from the end of November.
Together they suggested that sellers were dominant. A daily session closing below $0.071 would likely trigger a lower leg for DOGE. However, brave bulls may look to bid on the asset in this zone.
The $0.8 level reversed to support before surging to $0.119 a few weeks ago. As a horizontal level as well as a Fibonacci retracement level, it had significance. A retest as support in the next few days may offer a buying opportunity. The take profit targets would be the bearish circuit breaker at $0.091 and the highs at $0.11. Below $0.072, the next level of support lies at $0.065.
Open interest rose slightly over the weekend and the funding rate remained positive
Source: Coinanalysis
Since the beginning of December, Dogecoin has been experiencing a session with a sharp drop in price. These were accompanied by the liquidation of millions of dollars of long positions. Throughout the descent from $0.119 on December 5 to $0.075 on December 16, open interest also saw a decline.
This indicated that long positions were discouraged. The funding rate remained in positive territory, which also showed that the majority of the market has not started to pile into short positions.
