After consolidating towards the end of last week, dogecoin price is showing signs of a correction on its short-term time frame. The cryptocurrency price is edging slightly higher at the start of the trading week and may be due for a pullback to the moving averages on the 1-hour chart from tradingview.com.
- DOGE/BTC is nearing the 100 exponential moving average, which has held as a dynamic resistance level in previous pullbacks.
- A shallow bearish divergence can be seen, as price made lower highs in March 11 and March 16 while stochastic drew higher highs.
- Stochastic is crossing down from the overbought region and is moving below the 60 level, indicating a pickup in selling pressure and a potential decline in dogecoin price from here.
Take note that the shorter-term 20 EMA (red line) is also treading below the longer-term 100 EMA (green line), confirming that the downtrend is likely to stay intact.
As it is, dogecoin price is trading at 50 satoshis in the meantime, which is a psychological resistance level. If this keeps gains in check, price could head back to the previous lows to 40 satoshis in the longer run. For now, the near-term support level is located at 46 to 47 satoshis.
Positive developments in the bitcoin trading arena have been driving this particular cryptocurrency higher against its peers, which might lead to further price declines for DOGE/BTC. Increasing bitcoin acceptance in the mainstream reflects stronger appeal and potential compared to its altcoin counterparts.
Earlier technical analysis of dogecoin trading shows that the downtrend has been going on for quite some time. However, support at the 40 satoshis technical level indicates that buyers are still waiting around that area.
- Another move towards support at 40 satoshis could lead to a bounce for dogecoin price, as buying interest is very strong in that area.
- Stronger volatility is usually seen towards the middle of the trading week, with potential consolidation at the start and the end.
- DOGE/BTC has been forming lower highs, confirming that selling pressure is building up and might eventually be strong enough to trigger a downside break of 40 satoshis.
- If that happens, the cryptocurrency pair could be in for more prolonged losses, as sellers jump in the downside break.
On the other hand, an upside break past the 100 EMA resistance might be an early signal of a reversal and a potential uptrend for dogecoin. After all, the moving averages are inching closer, indicating a possible upward crossover, which would confirm a short-term rally. This seems to be a less likely scenario though, unless negative developments pop up in the bitcoin industry.
Increased regulation and the possibility of removing the authenticity of the blockchain could lead to significant downside pressure on bitcoin, which might lead traders to transfer to other cryptocurrency holdings that aren’t under the limelight such as dogecoin.
Conclusion:
Dogecoin is still on a longer-term downtrend, although short-term pullbacks have been taking place. The 100 EMA has served as a strong dynamic resistance level and may continue to do so since it lines up with the 50 satoshis psychological level. If this keeps rallies at bay, DOGE/BTC might resume its drop.