Dogecoin (DOGE) enthusiasts may need to temper their optimism, as a prominent cryptocurrency analyst warns of a looming deep pullback. The meme coin’s recent struggle to breach a critical resistance level has raised concerns about its short-term prospects.
In the world of cryptocurrency trading, resistance levels play a crucial role. These levels represent price points where an asset has historically struggled to move past. Resistance levels are significant because they reflect the collective sentiment of traders and investors. When an asset encounters resistance and fails to break through, it often signifies a lack of buying pressure and can lead to a reversal in price.
At the time of writing, Dogecoin is trading at approximately $0.067399 via CoinGecko, experiencing a 2.6% dip in the last 24 hours, although it has seen a modest 1.9% increase over the past seven days. The recent price movement, however, has raised concerns among traders and analysts.
Rekt Capital’s Bearish Dogecoin Prediction Respected crypto analyst Rekt Capital, who shares insights on the social media platform X, has issued a warning about Dogecoin’s potential downside.
According to Rekt Capital, Dogecoin’s price action in the past week indicates a possible drop to its support level at around $0.053.
$DOGE
Complicated Weekly Close for #dogecoin
1W Close occurred below the Channel Top resistance
This means that the #doge breakout is postponed
Previous 1W Closes like this -> downside
However if DOGE can hold the highs and reclaim the Channel Top as support – there may… https://t.co/oChRDTWvcc pic.twitter.com/HdrQHXTB1h
— Rekt Capital (@rektcapital) October 30, 2023
Rekt Capital’s analysis is based on the weekly close of Dogecoin’s price chart. They observed that the weekly close occurred below a crucial channel top resistance, which suggests a delay in DOGE’s breakout. Historically, similar weekly closes have often led to downward price movements.
However, Rekt notes that there is still hope for Dogecoin if it manages to hold its recent highs and reclaim the channel top as a support level.
DOGE market cap currently at $9.482 billion on the daily chart: TradingView.com Growing Open Interest In DOGE And SHIB Futures In a separate development, open interest in Dogecoin futures has surged by over 40%. This significant increase in open interest indicates that traders are placing larger bets on the future price movements of these cryptocurrencies. Such a surge in open interest often signals an expectation of increased volatility in the coming days.
Source: Coinglass The rise in open interest suggests that market participants are gearing up for more price swings, and this can be driven by a variety of factors, including major news events, changes in market sentiment, or the anticipation of new developments in the cryptocurrency space.
Rekt Capital’s analysis serves as a cautionary note for DOGE enthusiasts, and the surge in open interest indicates a growing appetite for volatility among traders. As the cryptocurrency market continues to evolve, it is essential for investors to stay vigilant and adapt their strategies to navigate the ever-changing landscape of digital assets.
Featured image from Shutterstock
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Christian Encila Christian, a journalist and editor with leadership roles in Philippine and Canadian media, is fueled by his love for writing and cryptocurrency. Off-screen, he’s a cook and cinephile who’s constantly intrigued by the size of the universe.