Dogecoin has rebounded strongly after plunging to a 6-month low, rising to an intraday high of 48.9 satoshis before profit booking set in. However, the swift price advance may not be the trend reversal that investors have been waiting for but rather an opportunity to exit the cryptocurrency.
Each Dogecoin can currently be bought for 46.8 satoshis.
A technical check of the 240-minute Dogecoin/Bitcoin price chart reveals that the virtual currency is at a crucial resistance level and traders may benefit from shorting it.
Dogecoin Chart Structure – Dogecoin has jumped sharply from the recent lows to challenge strong resistance levels. The chart above clearly tells that the cryptocurrency is trading close to the resistance level (marked in the chart) and has failed at least twice to breach the stop-loss levels (marked).
Bollinger Bands – As the price climbed above the 20-4h simple moving average of 44 satoshis, Dogecoin gained momentum and temporarily sustained above the upper range of the BB. However, the momentum soon fizzled out and the gains were quickly limited.
Relative Strength Index – The RSI indicator points to an increase in the underlying strength with a value of 56.5350. Sustaining the value above 50 is the key to maintaining an upbeat mood.
Volume – Volume readings still remain average or below average, indicating that the rise may have been due to short covering and not fresh buying.
Since Dogecoin has not really attracted buyers even at the lower levels, it can be construed that the undertone is still bearish. Market participants must utilize the current price level to build short positions while maintaining a stop-loss just above 49 satoshis for a target of 40 satoshis. High volatility may continue to shake the markets, so positions must be built keeping the personal risk-appetite in mind as well. Avoid speculative buying in the current scenario.
Each Dogecoin can currently be bought for 46.8 satoshis. Image: https://www.tradingview.com/x/d8uPzRko/ A technical check of the 240-minute Dogecoin/Bitcoin price chart reveals that the virtual currency is […]