Dogecoin experienced a notable 6% price increase on August 20, reaching towards the $0.11 mark. This surge was accompanied by a significant rise in trading volume. However, these gains were quickly erased, and the current analysis indicates that Dogecoin may face challenges in sustaining its price momentum.
What’s Happening with Dogecoin?
According to Santiment, Dogecoin’s one-day Realized Value has dipped to a monthly low of $12.43 million. This figure represents the total cost basis of assets within the network, reflecting the value of all assets based on their last movement. An increase in Realized Value suggests the cryptocurrency could be priced higher, as cheaper tokens are being spent. However, current data indicates a decline driven by capitulation, implying that the price might struggle to rise above $0.10. Access COINTURK FINANCE to get the latest financial and business news.
Furthermore, liquidation data highlights another challenge for Dogecoin. This heatmap predicts the price levels at which large-scale liquidations might occur. Liquidation happens when an exchange forces the closure of a position due to insufficient margin balance, aiming to prevent further losses for the user.
DOGE Chart Analysis
From a technical analysis perspective, Dogecoin’s Relative Strength Index (RSI) remains below the neutral 50.00 mark, indicating ongoing bearish momentum. For a bullish trend to be confirmed, the RSI needs to climb above this midpoint. Until this occurs, Dogecoin’s price is likely to remain under pressure, possibly falling below $0.09 and $0.10.
Examining Fibonacci retracement levels also provides insight into potential price movements. Currently, Dogecoin is hovering around the $0.10 level, corresponding with the 23.6% Fibonacci retracement. If market conditions remain unchanged, it’s unlikely that the price will rise beyond this point.
Key Inferences for Investors
Practical insights derived from the current analysis include:
- Sustained bearish momentum as indicated by the RSI below 50.00.
- Potential price level of $0.08 if broader market conditions worsen.
- Possible rise to $0.13 if buying pressure increases and market conditions improve.
- Critical importance of monitoring Realized Value and liquidation heatmaps for price predictions.
In conclusion, unless there’s an increase in buying pressure, Dogecoin’s price might continue to face challenges. While technical indicators and market conditions suggest difficulties in surpassing the $0.10 level, a broader market crash could drive the price down to $0.08. Conversely, improved market sentiment could see the price attempt to reach $0.13, where the 61.8% Fib level resides.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.
Source: https://en.bitcoinhaber.net/dogecoin-faces-price-struggles