Dogecoin (DOGE) has been trading within a horizontal channel since August 8, experiencing resistance at $0.11 and support at $0.09. Recently, the coin approached the resistance level, showing a 4% price increase over a week. However, the attempt to break through the resistance was thwarted by a negative divergence between price and trading volume, suggesting a potential price decline.
Resistance and Support Analysis
The asset’s movement within this horizontal channel reflects stagnant price action amid uncertainty in market sentiment. Despite the recent price increase, daily trading volume fell by 37%, indicating a lack of strength for a sustained rally. This divergence implies that fewer participants are buying Dogecoin, which could lead to a downward price adjustment.
In a healthy upward trend, increases in price are usually accompanied by rising trading volumes, showing strong buying interest. However, the current drop in volume during a price increase signals weakening momentum, with the rally potentially supported by only a limited number of investors.
What Influences DOGE’s Value?
The lack of whale activity further supports the bearish outlook for DOGE. Data from IntoTheBlock reveals a 100% decline in net flow of whales, indicating that these major players have refrained from trading in the past week. This absence of significant trading activity suggests vulnerability to a price drop.
Key Takeaways for Investors
Key inferences for Dogecoin investors include:
- The current horizontal movement indicates market indecision.
- Diminishing trading volume during price increases points to weakening buying momentum.
- Absence of whale trading activity underlines potential downward risk.
- If DOGE breaks the upper channel line, prices could exceed $0.11.
- Failure to sustain current levels could lead to a drop to $0.09 or even $0.08.
Despite the negative indicators, DOGE’s price continues an intriguing upward movement. The DOGE/TRY pair is noted at 3.62 TL, while the Parabolic Stop and Reverse (SAR) indicator has remained below the price level since August 10. Should DOGE break above the horizontal channel, the price might surpass $0.11. Conversely, a downward trend could bring the price back to the $0.09 support, potentially retreating further to $0.08.