With a top of approximately $0.0940, the price of Dogecoin appears to have momentarily halted from its previous rising trajectory. It is currently trading at $0.0840, down 4.8%. This price reduction is not exclusive to DOGE; it has also affected other cryptocurrencies like Shiba Inu, Cardano, Shiba, and Ethereum.
The overall market value of all cryptocurrencies decreased by almost 3.5%, holding just above $1 trillion. Since bulls began to aggressively push for higher prices in early January, this is the first significant correction. The meme coin mania was revived by the upward movements in Dogecoin and Shiba Inu, which helped the cryptocurrency market reclaim the $1 trillion valuation threshold a few weeks ago.
The surge appears “promising on paper,” according to a letter about the market’s situation that Bitfinex exchange supplied to CoinDesk, but assets still don’t have the support of investors.
Here’s Why the Dogecoin Price Rally is Expected to Continue After Taking a Breather
The three-week increase in the price of Dogecoin has stalled, but price research suggests that the uptrend will soon continue. On the daily time chart, a green candle is forming and is confluent with the red 50-day EMA, the 100-day EMA, and support at $0.0802. (in blue).
The 200-day EMA (in purple) and the bottom of the descending trend channel serve as immediate opposition, which bulls must overcome by keeping their feet on the ground. Bulls pushing for gains over $0.10 will only have to worry about the upper boundary of the channel if they successfully break and hold above this selling congestion zone.
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The likelihood that the Moving Average Convergence Divergence (MACD) indicator would change from a buy to a sell is increasing even though it is still maintaining the buy signal from the beginning of the year. Because losses could become more severe if the MACD (line in blue) crosses below the mean line, traders must keep an eye on its movement in the sessions to come. Additionally, approaching the mean line and perhaps the negative zone would spark a sell-off that would probably drive the price of Dogecoin to $0.0722 and $0.0602, respectively.
The price forecast for Dogecoin in shorter time frames is relatively dim, which is further worsened by a negative volume flow that the Money Flow Index (MFI) indicator has detected. The MFI gauges momentum by taking into account the inflow and outflow of funds in DOGE markets, much like the Relative Strength Index (RSI).
It appears that sellers are in control given the MFI’s abrupt decline from the overbought region into the oversold region. As soon as the price of Dogecoin fell below $0.09, investors began to speculate on short bets, and more investors joined the selling frenzy below the 50-day EMA at $0.0855.
More short positions would be opened below the 100-day EMA if the downward trend continued, with profit booking most likely occurring below the 200-day EMA (in purple) and $0.08.
Is It Safe to Purchase the Dogecoin Price Dip Right Now?
Despite this mid-week dip, the price of Dogecoin might soon resume its upward trajectory. A buy signal from the Super Trend indicator could be credited with providing important clues for such a bullish scenario. This technical index measures market volatility by using data from the average true range (ATR) to overlay the chart like a moving average.
The likelihood of a bullish result is higher as long as the Super Trend signal is in the rearview mirror of the Dogecoin price. Furthermore, the DOGE price could perhaps regain momentum from the 100-day EMA (seen in blue) on the four-hour time frame chart.
Because of this, traders who want to place new buy orders might want to hold off until the Dogecoin price breaks through the 50-day EMA on the same daily chart. Buyers will be anticipating a breakthrough above $0.09 and $0.10 from here on out.
The fact that the Dogecoin price has good support could be because so many investors made money following the breakout in January. According to the IntoTheBlock IOMAP model, there was a significant buyer’s market between $0.0738 and $0.076, where 51k addresses bought about 40 billion DOGE. Investors in this area would be eager to support the price of Dogecoin in order to support the continuation of the surge.