In my previous analysis, I had mentioned that Dogecoin at 35.7 satoshis was oversold from a short-term perspective and that market participants must wait for a relief rally up to 42 satoshis to build fresh short positions in the virtual currency. As can be seen, Dogecoin touched 41.5 satoshis before it pierced the temporary support level to succumb to a fresh 2015-low of 32.7 satoshis.
Reeling under pressure, Dogecoin can currently be bought for 35 satoshis.
The market is strongly favoring the short sellers, and there are not enough convincing reasons which make Dogecoin a good contrarian play. Analyzing the 240-minute Dogecoin/Bitcoin price chart helps us in predicting that the virtual currency may extend its downward trend and sellers can make huge profits while following a simple “sell on rise” strategy.
Dogecoin Chart Structure – Dogecoin breached the temporary support of 35.7 satoshis following the downtrend and arrested the losses as it approached the floor of the range (see the chart above). The updated support and resistance levels are 32.8 satoshis and 41.7 satoshis respectively.
Bollinger Bands –The bulls are finding it extremely tough to scale and sustain above the resistance imposed by the 20-4h simple moving average. The latest SMA reading is 40 satoshis.
Relative Strength Index – In conjunction with the price collapse, the strength reading also nosedived to a fresh 1-week low of 24.4921. A pullback from the lows ensured that Dogecoin came out of the oversold territory; the latest RSI reading is 34.0821.
Conclusion
Traders must look to create short positions as the price approaches 40.5 satoshis while placing a stop-loss above 41.7 satoshis for a target of 35 satoshis. This trade offers huge profit potential at less risk. Aggressive traders may also tweak the trading levels to suit their profit and risk preferences. The market may continue to offer numerous trading opportunities going ahead as well.
Reeling under pressure, Dogecoin can currently be bought […]