TLDR
- Dogecoin price fell nearly 30% from its July peak of $0.28 to test the $0.19 support level
- A late-July 20/200-day golden cross suggests the broader uptrend remains intact despite current weakness
- Exchange data shows traders remain bullish with long positions outnumbering shorts by 3:1 on Binance
- Momentum indicators like RSI and MACD show cooling but may be resetting for a potential rebound
- Analyst Cantonese Cat cites “great risk-reward” at current levels as DOGE forms a falling wedge breakout pattern
Dogecoin has experienced a sharp correction over the past two weeks, dropping nearly 30% from its five-month high of $0.28 reached on July 21. The popular meme cryptocurrency is now testing a crucial support level at $0.19, leaving traders wondering if this marks a buying opportunity or the start of a deeper decline.
The sell-off comes amid broader market pressure triggered by macroeconomic factors. President Trump’s recent announcement of new import taxes ranging from 10% to 41% on goods from several countries has dampened risk appetite across financial markets.
Despite the recent price drop, technical analysis indicates the long-term uptrend may still be intact. A golden cross between the 20-day and 200-day moving averages occurred in late July, which typically signals bullish momentum from a structural perspective.
However, shorter-term momentum indicators tell a different story. The Relative Strength Index (RSI) has fallen from an overheated reading above 80 to below 50, entering bearish territory. The Moving Average Convergence Divergence (MACD) indicator has also flipped bearish, confirming the loss of upward momentum.
Support Level Analysis
The $0.19 price level represents a key technical battleground for Dogecoin. Bulls have so far managed to defend this support zone, preventing a deeper correction to the next major support levels at $0.17 and $0.15.
A decisive daily close below $0.19, especially on high volume, would likely trigger further selling. Such a breakdown could result in a 12% to 24% drop from current levels, targeting those lower support zones which coincide with high liquidity areas.
Conversely, a successful defense of the $0.19 level could set up a rebound toward the 20-day exponential moving average near $0.22. If buyers regain control, a move toward the resistance at $0.24 becomes possible, potentially setting the stage for a retest of the $0.30 psychological barrier.
The price currently hovers near the 50-day and 200-day exponential moving averages, both situated around $0.206-$0.207. These key technical levels will likely play a crucial role in determining the next directional move.
Trader Sentiment Remains Bullish
Despite the price decline, derivatives data suggests many traders maintain an optimistic outlook. According to Coinglass, open interest in Dogecoin futures has held steady at approximately $3 billion, even as trading volume decreased by 37% to $4 billion over a 24-hour period.
What’s particularly telling is the long/short ratio on major exchanges. Binance data shows long positions outnumbering shorts by 3:1, while OKX displays an even stronger bullish bias with a ratio of 3.6:1. This indicates that while momentum traders may have stepped back, larger market participants continue to bet on a recovery.
Popular analyst Cantonese Cat recently identified Dogecoin as offering “great risk-reward” at current levels. The analyst noted that DOGE has broken out of a “bear market trendline” and is retesting a “bull market” support band, potentially setting up for a continuation of its uptrend.
I bought a little bit more $DOGE and #Fartcoin last night, but you pretty much knew that I think it's great risk-reward here and that I'll do what I can to buy anyway. https://t.co/ccUByCNFnh
— Cantonese Cat
Technical chart patterns support this view, with Dogecoin forming a falling wedge breakout structure. This pattern, combined with a successful back-test of the trendline as support, could target the $0.25 resistance level for a potential 25% gain if momentum holds.
The Federal Reserve’s decision to maintain current policy rates has also impacted market sentiment. However, speculation around a potential September rate cut remains high, which could stimulate new inflows into cryptocurrencies and other risk assets if borrowing costs decrease.
For now, traders appear to be in a wait-and-see mode, with many positioned for a potential recovery once the current consolidation phase concludes. The $0.19 support level will remain crucial in the days ahead, likely determining whether Dogecoin resumes its uptrend or faces a deeper correction toward $0.15.
Dogecoin’s weekend price action showed an 8% bounce, potentially signaling the start of a new uptrend despite lingering macroeconomic concerns.
The post Dogecoin (DOGE) Price: 30% Drop Tests $0.19 Support Level as Technical Indicators Reset appeared first on Blockonomi.
Source: https://blockonomi.com/dogecoin-doge-price-30-drop-tests-0-19-support-level-as-technical-indicators-reset/