TLDR
- Dogecoin has fallen below the $0.18 resistance level, continuing a bearish trend
- Technical indicators show DOGE trading below the 100-hourly simple moving average
- On-chain metrics suggest the memecoin may be undervalued, presenting a potential buying opportunity
- Exchange outflows indicate possible accumulation despite downward price movement
- Traders should prepare for continued volatility with possible retest of $0.17 support level
Dogecoin, the leading memecoin in the cryptocurrency market, continues to experience downward pressure as it struggles to maintain key support levels. The digital asset has been unable to break through the $0.20 resistance level and has recently dipped below $0.18, signaling that bearish sentiment remains strong in the short term.
The cryptocurrency market as a whole has been attempting to stabilize following a tumultuous end to the previous week. Bitcoin has established a pattern of experiencing drops toward the end of the week, ranging over the weekend, and then beginning recovery efforts on Mondays since May 23rd.
DOGE’s price action remains firmly bearish according to chart analysis. The coin is trading below the 78.6% Fibonacci retracement level based on its early May rally. A liquidity cluster exists at the local low of $0.17, suggesting the price may dip to this level again before any meaningful recovery can begin.
On-Chain Metrics Offer Mixed Signals
The Network Value to Transactions Signal (NVTS) metric, which helps determine if an asset is overvalued or undervalued based on network utility, currently shows levels below those seen in May-June 2024. This indicates that Dogecoin may be undervalued at current prices, potentially presenting a buying opportunity for investors with a longer time horizon.
Exchange net position change data has turned negative in early June, similar to what occurred in January earlier this year. This metric suggests accumulation as DOGE flows out of exchanges, meaning less Dogecoin is available for selling on trading platforms.
However, these potentially positive indicators don’t necessarily mean an immediate rally is forthcoming. Earlier this year, despite similar accumulation signals, DOGE trended downward for three months.
The short-term technical outlook remains challenging. DOGE is currently trading below the $0.180 level and the 100-hourly simple moving average. A bearish trend line has formed with resistance at $0.176 on the hourly chart.
Key Support and Resistance Levels
For traders watching key price levels, immediate resistance sits near $0.176, with major resistance at $0.178 and $0.180. Breaking above these levels could potentially open the path toward $0.188, which represents the 50% Fibonacci retracement level of the recent downward move from $0.206 to $0.169.
On the downside, initial support can be found near $0.172, with major support at $0.170 and $0.168. A break below these levels could accelerate the decline toward $0.155 or even $0.152.
Technical indicators present a mixed picture. The MACD for DOGE/USD is losing momentum in the bearish zone, while the RSI has moved above the 50 level, suggesting some relief may be possible in the very short term.
The recent price action follows failed attempts to clear the $0.188 resistance zone. DOGE subsequently declined below several key support levels, reaching a low of $0.169 before entering its current consolidation phase.
Traders should remain cautious in the current market environment. The sustained selling pressure evident in on-chain volume indicators highlights continued seller dominance despite the potential accumulation signals.
For those looking to establish positions, dollar cost averaging might be a prudent strategy given the expectation of continued volatility and possible further tests of lower support levels in the coming days.
The most recent data shows Dogecoin price continuing to struggle near the $0.170 level as bears maintain control of the market momentum.
