Dogecoin Price Forecast: Bullish divergence hints at DOGE recovery
- Dogecoin steadies at $0.070 on Tuesday after correcting 3.5% in the previous week.
- Derivatives metrics support a recovery, with long bets reaching the monthly high and positive funding rates.
- The technical outlook shows a bullish divergence, suggesting bearish momentum may be losing strength.
Dogecoin (DOGE) steadies near $0.070 at the time of writing on Tuesday after falling 3.5% last week. While the broader trend remains bearish, improving derivatives metrics and bullish divergences in momentum indicators suggest that selling pressure may be easing, hinting at a potential recovery.
Derivatives metrics support a bullish bias
Derivatives data shows bullish sentiment among Dogecoin traders. CoinGlass’ long-to-short ratio for memecoin reads 1.25 on Tuesday, the highest level over a month. A ratio above one indicates bullish sentiment, as traders are betting the asset price will rise.
In addition, CoinGlass’ funding rates metric for Dogecoin flipped positive on July 24, reading 0.0074% on Tuesday. These positive rates indicate that long traders are paying shorts and reflect a bullish bias for the dog-themed meme coin.
Dogecoin technical outlook: Bullish divergence in momentum indicators
Dogecoin trades at $0.070 on Tuesday, maintaining a bearish near-term bias as price holds below the 50-day, 100-day, and 200-day Exponential Moving Averages (EMAs) at $0.075, $0.083, and $0.100, respectively.
Momentum indicators show a bullish divergence in the Relative Strength Index (RSI) on the daily chart, as DOGE price formed a lower low on August 1 while the RSI registered a higher low, suggesting that bearish momentum is weakening. The Awesome Oscillator (AO) supports this divergence as its recent lows are rising while price remains near its lows, indicating that downside momentum is fading.
On the downside, immediate support is seen at the horizontal level of $0.070, with next support at the yearly low at $0.067; a close below it suggests deeper losses toward the key psychological level of $0.065.
On the topside, initial resistance is defined by the 50-day EMA at $0.075, followed by the descending trendline break region near $0.080 and the 100-day EMA at $0.083; a stronger barrier is found at the $0.088 horizontal resistance, ahead of the 200-day EMA at $0.100 and the key horizontal cap at $0.102, levels that would need to be reclaimed to ease the prevailing bearish tone.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Author
Manish Chhetri
FXStreet
Manish Chhetri is a crypto specialist with over four years of experience in the cryptocurrency industry.
