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Following a protracted downward trend, Dogecoin most recently tested its final support level at $0.14. But a recent upswing has raised hopes for a possible recovery above $0.20. Although it is feasible, a number of conditions must coincide for DOGE to recover its strength.
Following a significant support zone, DOGE's price action points to a brief relief rally. The asset is now closer to the $0.18 resistance level, which needs to be overcome for a long-term recovery thanks to the bounce. The market may move toward $0.20 if bulls continue to exert buying pressure.
Nonetheless, DOGE is still trading below important moving averages, and the general trend is still bearish. A technical event known as the impending death cross in which the 50-day moving average crosses below the 200-day moving average is one of the main challenges facing DOGE. Considered a strong bearish signal, if sellers regain control, this could cause DOGE to decline even more.
If the death cross appears, DOGE might find it difficult to maintain any upward momentum and could revert to $0.14 or below.
Immediate support: $0.14: It is essential to stay above this level to stop additional declines.
Resistance levels: $0.18 and $0.20; a strong bullish push may be initiated by a clear breakout above $0.20.
Bearish scenario:
Dogecoin will have to find a stronger influx of buyers and join the general recovery of the cryptocurrency market in order to exit a downtrend and return to sustained growth. The bearish sentiment around the meme coin also pushes the overall sentiment around DOGE down, creating unnecessary issues for the asset.
The trading volume for DOGE right now is not optimal or enough for a proper recovery. Without the demand, short-term rallies fade quickly and do not turn into something more significant for assets like Dogecoin.
Dan Burgin
Vladislav Sopov