Dogecoin, the popular dog-themed meme coin, has defied today’s broader crypto market weakness, increasing in price by 0.39 percent to trade at $0.1044 at the time of writing. Despite this modest rise, it is essential to understand that this altcoin’s journey has not been an easy one.
Earlier this week, on Monday, the cryptocurrency retested the key resistance level around $0.115, but was unable to maintain its momentum and experienced a decline of just 10%. Following this decline, the token has fallen below the 50 SMA at $0.1057, suggesting potential downside pressure in the short term.
However, following this decline, the DOGE token has stabilized around the support trend line drawn from recent lows, which could serve as a key level for buyers to defend to prevent a deeper decline. .
This indicates that although there may be some downside pressure in the short term, a rebound is still possible if key support levels hold. Indeed, whether the cryptocurrency can sustain above the $0.10 mark will be a key test of its strength and resilience in the face of market volatility.
On-chain data suggests negative price action
In addition to the unfavorable price action from Dogecoin’s technical data, on-chain indicators are also pointing to a bearish outlook for the token. According to IntoTheBlock data, the token trading volume has been steadily declining, highlighting the lack of interest and activity among investors.
Just on October 7th, the token peaked at 553.99k transactions at a cost of $0.11, but has since plummeted to just 73.45k transactions and $0.108. Furthermore, the number of large transactions has decreased from a weekly high of 1.32,000 to 1.1,000, indicating a possible decline in institutional investor participation in cryptocurrencies.
These combined factors indicate that the ongoing negative price movement is likely to continue in the short term and could lead to a breakout of key support levels unless market sentiment changes. .
Can DOGE sustain above $0.10?
From a technical perspective, DOGE token is expected to show further selling pressure as it struggles to maintain support above the $0.10 level. For example, the RSI index is currently showing a bearish dominance and is pointing to the downside. Located at 45.03, this indicator suggests that there is plenty of room for further decline before reaching an oversold situation.
Such a scenario could cause Dogecoin to fall below the $0.10 support level and find a new lower support level around $0.092. If this area also weakens, the token is expected to retest the September lows around the $0.088 price point before attempting another bullish reversal. However, if market sentiment changes and buyers emerge willing to defend the $0.10 support level, the cryptocurrency could rebound towards the $0.115 resistance.
Moreover, a successful breakout of this important barrier could signal a reversal of the current downtrend and open the door to a retest of the higher resistance level around $0.126. This level coincides with the 78.6 Fibonacci retracement, suggesting that bullish momentum could extend beyond that point.
Also read: Ripple Price Prediction: How high will XRP rise this weekend?
