How a ‘flipping’ could be the key to Dogecoin investors buying again

Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice

In terms of the long-term outlook, Dogecoin has been in a downtrend since June last year. The price has failed to reach a higher high and has registered a series of lower lows to characterize a downtrend. There have been times in between when DOGE bulls have driven a wave upward, but the long-term trend has continued downward. Can a Bullish Bitcoin Catalyze a Reaction?

DOGE- 1-Day Chart

Source: DOGE/USDT on TradingView

Since December, the price has tested the USD 0.2 supply area several times but was rejected on every attempt, the last being in mid-January.

A string of Fibonacci retracement levels was drawn based on DOGE’s decline from $0.34 to $0.12. In early February, the broader crypto market saw some near-term bullishness, and so did Dogecoin. But even this uptrend was rejected at the $0.1723 retracement 23.6% level.

This indicated that Dogecoin could see further losses in the coming weeks. To break through the bearish market structure, DOGE needs to flip the $0.1723 and $0.196 levels to support market participants and convince them that the long-term trend could have reversed.

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Source: DOGE/USDT on TradingView

The daily RSI has risen past the neutral 50 only a few times in the past two months and has not been able to rise above 60 on either attempt. Since late November, the RSI has been below neutral 50, indicating that bearish momentum has been significant in recent months.

On the OBV, there were no strong indications that the buying volume was increasing. The OBV has formed higher lows in recent months – which was somewhat encouraging, but not enough information to buy DOGE based on.

The MACD also struggled to rise above the zero line – it hasn’t succeeded since November, although it was about to form a bullish crossover below the zero line.

Conclusion

The market structure for DOGE has been bearish and every bounce from the $0.135 and $0.12 levels has been weaker and weaker. Simply put, demand has been declining lately.

Therefore, risk averse investors would like to see the $0.135 level flip to support before considering buying.

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