Dogecoin price is teetering on the brink of a significant correction, with the potential to retest the long-term support level of $0.1. However, a combination of whale accumulation and the formation of a falling wedge pattern could signal a potential reversal.
The recent price surge in Dogecoin was met with a swift decline, leading to a spike in long position liquidations. This downtrend suggests that the meme coin is back to square one, raising concerns about a prolonged correction.
Key Factors Influencing Dogecoin’s Price:
- IOMAP Resistance: The presence of a strong seller congestion zone between $0.1101 and $0.1134 could hinder Dogecoin’s upward momentum. Unless bulls can overcome this resistance, a rally will remain elusive.
- Derivatives Open Interest: A decline in Dogecoin futures’ open interest indicates a potential shift in sentiment or a lack of confidence in the coin’s price direction.
- Whale Accumulation: Whales are actively accumulating Dogecoin, suggesting a long-term bullish outlook. This could provide support to the price.
Technical Analysis:
- Falling Wedge: The formation of a falling wedge pattern on the daily chart hints at a potential breakout to $0.185. A successful breakout could signal a bullish reversal.
- RSI: The Relative Strength Index (RSI) is currently in the neutral region, suggesting that neither buyers nor sellers have a clear advantage. A drop below the oversold region could lead to a short-term price decline.
Conclusion:
Dogecoin’s price is facing a critical juncture. While whale accumulation and the potential for a falling wedge breakout offer hope for a reversal, the presence of strong resistance and declining derivatives open interest pose significant challenges. The next few days will be crucial for determining the direction of Dogecoin’s price.