What happens when Dogecoin, affectionately known as DOGE, faces a weak support level? To put it simply, it could spell trouble for the ‘meme coin’. Despite maintaining its position above the pivotal $0.06 support level, there are indications that the selling pressure may soon overpower buyers. Although the market correction in the past day hindered DOGE’s upward trajectory from this support level, the buyers managed to maintain the support. As of the time of writing, DOGE is trading at $0.0617.
DOGE’s Weakening Support Level
The $0.06 support level has traditionally been a significant rallying point for the bulls. This level marked the beginning of the bullish rally to the Q3 high of $0.0838 in mid-June. Furthermore, this level has been instrumental in resisting sustained selling pressure. However, recent price activity around this level hints at potential exhaustion of bullish momentum. Frequent retests of this level have curbed the buying pressure of the bulls, and on-chart indicators are suggesting a possible dip below this level.
Indicators of a Possible Downturn
The Relative Strength Index (RSI) has dipped below the neutral 50, signaling a decrease in buying power. Similarly, the Chaikin Money Flow (CMF) has dropped from +0.11 to +0.02, suggesting moves by DOGE traders to preserve capital. If the $0.06 support level breaks, sellers may aim for the $0.0557 to $0.0580 price zone. Conversely, if the bulls manage to maintain the support level and Bitcoin recovers, buyers could push for gains at $0.0640 to $0.0670.
Market Speculation and DOGE
Despite the recovery at the $0.06 support level, Open Interest (OI) has decreased by 2.13% over the past 24 hours. This suggests a lack of confidence in DOGE’s recovery among market participants. Similarly, the spot CVD has continued to trend downwards, indicating that market speculators are reducing their exposure to DOGE in anticipation of a continuation of its bearish market structure.
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