Extending its losing spree, Dogecoin crashed 20% in a matter of hours on a huge spurt in volume and touched a fresh 2015-low of 29.8 satoshis. I had conveyed in my previous analysis that the level of 40.6 satoshis is a strong resistance level and traders should create short positions when the price nears the resistance.
Helped by partial profit booking, Dogecoin has pared some losses and is now trading at 32.4 satoshis.
An analysis of the 240-minute Dogecoin/Bitcoin price chart reveals that the cryptocurrency has witnessed heavy institutional selling, and the chances of it surging above 40 satoshis have slimmed down considerably.
Dogecoin Chart Structure – As can be seen from the chart above, the bloodbath in Dogecoin temporarily forced it below the support level, however, a massive unwinding of short positions helped the price surge to a high of 35.1 satoshis before being brought down.
Bollinger Bands – Dogecoin witnessed a strong selling pressure above the 20-4h simple moving average. Sustaining above this technical level has proved to be an insurmountable task for the virtual currency.
Volume – investors have dumped their Dogecoin investments in copious amounts as pessimism continues to persist. The trading activity jumped significantly.
Relative Strength Index – As expected, the virtual currency went oversold following the collapse but short covering helped the RSI indicator rise again to 35.8074.
Conclusion
The bulls have been mauled decisively by the bears in this battle. The optimism of the buyers has been dented and Dogecoin may not be able to shed the pessimism quickly. In case, the price rises to 39-40 satoshis, market participants must build short positions for a revised target of 30 satoshis. High volatility will continue to rock the markets, so position your trades wisely. This is a falling knife, so avoid catching! Dogecoin remains a perfect sell on rise candidate, so shed your fears and go short on rallies.
Helped by partial profit booking, Dogecoin has pared some losses and is now trading at 32.4 satoshis . An […]