- Dogecoin struggles to maintain momentum as prices drop within a consolidation range.
- Bearish sentiment dominates the market, with sellers exerting pressure.
Dogecoin (DOGE) has encountered difficulties maintaining upward momentum after reaching a recent high of $0.48. The memecoin, therefore, has been trading within a consolidation pattern of $0.42 and $0.37 due to high market volatility. Today, DOGE is at $0.3832, which is 4.11% lower than the daily charting.
Bearish Sentiment Dominates DOGE Market
The majority of Dogecoin traders are bearish, which indicates a changing market scenario may be in the offing. An influential crypto figure, Ali Martinez, has noted in his analysis that bulls are getting restless as the price remains in the congestion zone. Such a change from bullish to bearish indicates buyers are exhausted while those on the selling side are fully ingrained.
When sellers take the lead, exploitation pressure is high, supply is beyond demand, and prices drop. The trend for DOGE further supports this decline in the Relative Strength Index (RSI), which has decreased over the last 10 days. Some investors are selling what has risen recently but are not covering what may fall, aggravating the decline.
Other samples of data from Coinglass clearly show that short sellers control the 24-hour frames at 54% and the 4-hour frames at 64%. Such a development indicates that every market participant is anticipating a further decline in the price level.
Technical Indicators Signal Further Decline
Dogecoin’s price charts provide additional evidence of a weakening market position. The positive directional index (+DI) has consistently declined, indicating a loss of upward momentum. Simultaneously, the strengthening downtrend signals reduced buying activity and increasing bearish pressure.
The second main signal, the Price DAA (Daily Active Addresses) differential, has again stayed in negative territory during the week. It was shaping its weakness by indicating declining investor attention towards the asset.
Under such circumstances, DOGE might afford more losses and can go as low as $0.367 under bearish pressure. Nonetheless, a decline to this level can draw demand, making it possible to bounce back to the price level. However, purchasing power could return to the market with adequate volume, causing the DOGE to bounce back to the $0.40 resistance level.
Consequently, fluctuating market conditions and bearish sentiments have impacted Dogecoin during the recent trading session. Despite current indicators suggesting a further decline, the market is not static. An influx of new demand could alter the trend, highlighting the importance of staying alert to technical signals and broader market dynamics.
