Retail traders have overlooked Dogecoin for quite some time. The alt was currently trading at a near 80% discount to its May ATH and offered a negative monthly ROI of 22%. Mini rallies have not resulted in extended price recovery and instead, DOGE’s value has declined below important support levels. While oversold readings on the RSI and Bollinger Bands do prompt a rebound, broader market worries could extend DOGE’s value by another 6%-10% before buyers renter the market. At the time of writing, Dogecoin traded at $0.17, down by 5.4% over the last 24 hours.
Dogecoin 4-hour time frame
Trading below the 20 (red), 50 (yellow), and 200 (green) SMA’s, Dogecoin faced the threat of short-selling heading forward. Although the 4-hour RSI and Bollinger Bands flashed oversold readings, Bitcoin’s slip below $46,000 would stave off any long bets in the DOGE market for the moment. The lack of immediate support levels can see DOGE decline by another 6%-10% in the coming hours. Support between $0.16-$0.15 would be crucial but if bears push through, expect another 13% decline to 4 December’s swing low of $0.13.
Indicators
As highlighted earlier, oversold readings on the RSI and Bollinger Bands might not be enough to warrant new longs. Extreme FUD could even see the RSI push well below 20- something which was observed during the broader market crash between 3-4 December. To initiate a rebound, the bulls now faced an uphill task. The 20-SMA (red) must be toppled on good buy volumes and bulls must overcome $0.1855 resistance without any hiccups. A close above $0.1966 would take short-sellers out of the picture and pave way for a more sustainable rally.
Conclusion
Those wishing to enter the market must wait until DOGE shows positive signs between $0.16-$0.15 support. Until then, short-selling is the way to go. Safe entries can be made if and when DOGE tags its 4 December’s swing low of $0.13.