- Dogecoin price has broken through some important supportive factors.
- Buyers will need to wait for a solid entry opportunity.
- Expect price action to be capped at $0.26 and instead look for a retest of $0.21 before price action in DOGE starts to recover.
Dogecoin (DOGE) has not been in a sweet spot for buyers and investors since mid-August. After a failed attempt from buyers to close above $0.35, price action in DOGE has been trading downwards in favor of the sellers. Sellers are eyeing another push to the downside with the second test of $0.21.
Dogecoin price faces on critical resistance barrier
Dogecoin price is getting more and more technical indicators in the bearish corner, building a case for another push to the downside. Last week a failed attack from buyers on the red descending trend line caused buyers to get flushed out of their longs, with sellers pushing DOGE price action 30% lower. Bears ran the stops from buyers who placed their stops below the 55-day and 200-day Simple Moving Average (SMA). That made price action dip quickly towards $0.21.
In the meantime, buyers attempt to stabilize price action in DOGE, but a bull trap is starting to form. Bulls do not look able to push price action above $0.26, and the 55-day SMA just below is adding a cap on the price action, thus limiting any upside potential.
DOGE/USD weekly chart
Expect price action in DOGE to fade and start trading down towards $0.21. In terms of strength, that level looks quite bleak. The monthly S1 support at $0.19 might help a little bit. But the ultimate price target for sellers will be $0.14. That level was the low from mid-April, and except for a dip in June, price action has not been around these low levels in the past few months.
Should buyers avoid the bull trap and break above $0.26, the volume will be added to the charge higher. Yet, the red ascending trend line at the topside will limit any further profits unless a favorable tailwind can act as a catalyst for a boost in conviction and sentiment next week.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.