Dogecoin (DOGE) Holds Firm at Critical Support After Sharp 6% Pullback
Dogecoin finds its footing after a sudden drop, testing a level traders are watching like hawks.
The Consolidation Zone
Following a swift six percent decline, DOGE price action has entered a phase of compression. It's not a freefall, but a tense standoff—buyers and sellers are battling it out near a historically significant price floor. This isn't panic selling; it's a strategic regrouping.
Why This Level Matters
Major support isn't just a line on a chart—it's a collective memory of where demand previously overwhelmed supply. A hold here suggests underlying strength and a potential springboard. A break below, however, could trigger another wave of selling as automated stops get hit. The market's watching to see if the 'people's crypto' still has its meme-fueled resilience or if it's just another asset waiting for Elon to tweet.
The Bigger Picture
Short-term pullbacks are the market's digestion process. For Dogecoin, this consolidation near support is a crucial stress test. It separates weak hands from diamond-pawed holders. Remember, in crypto, a six percent move is just a Tuesday—hardly worth the fees your traditional broker would charge you for the privilege of underperformance.
All eyes are on whether DOGE bounces or breaks. The next move could set the tone for the memecoin sector.
Rejection at Resistance Shakes Short-Term Confidence
Trader Tardigrade observed that a bearish confirmation occurred when Dogecoin made contact with the Ichimoku Kumo Cloud and was immediately rejected. This represented a fall of 6.52%, and this is further evidence that the Cloud is a very strong resistance zone.
The Ichimoku indicator is well-renowned for demonstrating trend strength and equilibrium, and making contact with the Kumo generally indicates that the trend is still dominated by a seller.
Source: X
Talking about the broader picture in the daily chart, Dogecoin’s initial positive phase is over. The coin formed a rounded bottom and initially moved up with a steady uptrend, making higher highs and higher lows.
The demand kept moving steadily, and even during corrections, they happened in an orderly manner. However, after hitting peak values in late summer, this changed. DOGE started making lower highs and lower lows, indicating distribution and not panic selling.
Dogecoin Support Zone Could Shape the Next Move
BitGuru pointed out that dogecoin is currently close to strong support and liquidity levels following many weeks of dropping. Current price is held steady between $0.12 and $0.13, corresponding to a former level of demand and a typical value for traders.
Source: X
The ranges on the candles have compressed, and the drop has lost momentum, suggesting that selling pressure is reducing. A steady increase to the level between $0.18 and $0.19 could then follow.
On the weekly chart, Dogecoin is at approximately $0.128 levels, holding below key moving averages. It faces tough resistance at the 20-week EMA of $0.176 levels and the 50-week EMA of $0.194 levels.
Additionally, DOGE has been attempting to move above the 200-week EMA of approximately $0.155 levels. Failure to reclaim this support zone WOULD make the larger structure weak.
However, the volatility has decreased as the tighter Bollinger Bands indicate that this market may become more active in the future. In fact, the lower band at around $0.102 corresponds with the long-term demand area.
Source: Tradingview
Momentum is not strong at this point, with RSI values at 36, and the MACD still in the negative region. But the reduction in the strength of downside pressure indicates this market could remain flat in the interim before a new path emerges.
