- Dogecoin struggles near $0.206, facing critical resistance and support levels.
- Will Dogecoin bounce back or continue its downward price spiral?
- Negative market flow hints at potential breakdown for Dogecoin’s price.
Dogecoin’s price is facing a critical battle as it hovers near $0.206, testing key support levels. After retreating from the $0.26 resistance last week, the coin is now stuck in a consolidation phase. In case volume fails to improve, it could face the danger of an additional breakdown in the descending channel formation that has been directing its price action.
At the moment, Dogecoin is trading at a very slight premium over $0.20, with horizontal support proving to be the key. Nonetheless, the efforts to overcome the resistance band of $0.217- $0.220 have failed, indicating indecision in the market. This level has been a major obstacle, and should it fail to move above it, it may go down further.
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The Risk of a Bigger Breakdown Looms
The market sentiment for Dogecoin is leaning towards a bearish outlook. Signs of indecision are evident, particularly on the 30-minute chart, where the price is battling the Volume Weighted Average Price (VWAP) strip of between $0.205 and $0.207.
The Relative Strength Index (RSI) of 60.67 shows that momentum is declining, and the Supertrend has turned bearish, indicating high resistance at the price of about $0.2468.
Also, the Bollinger Bands are converging at a level of $0.206-$0.210, indicating that Dogecoin is stuck in a tight range. The price is stuck below all the significant Exponential Moving Averages (EMAs), which are serving as resistance.
A decline here would bring the price back to the lower support area of $0.195-$0.196, increasing the likelihood of a bigger crash.
Negative Market Flow Adds Pressure
Market flow data shows a negative outflow of $1.37 million from exchanges, adding a mild bearish bias to the situation. Although the On-Balance Volume (OBV) indicator is staying at $64.5 billion, there are no indications of a significant increase in the buying volume that could change the current direction.
Source: Tradingview
Unless the volume rises, there is a higher probability of a more significant price fall, and Dogecoin will be at the mercy of another downturn.
In the short run, Dogecoin will trade in a tight range between $0.203 and $0.213. However, once it breaks above $0.213, it might find higher targets as high as $0.226 or higher to $0.246 as long as the bullish momentum gains momentum.
On the other hand, if the bears maintain control, a drop back to the $0.195 level could be imminent, signaling a potential continuation of the downward trend.
As the market braces for potential moves, traders will monitor volume and price action closely to determine whether Dogecoin can rebound or face an even deeper crash.
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