Following a notable surge earlier this month that pushed Dogecoin above the crucial threshold of $0.20, the meme-inspired cryptocurrency is exhibiting early signs of potential weakness. Today, Dogecoin is testing its resilience, as it appears to be heading towards another dip below the $0.20 mark, having experienced a decline of about 15% from its recent peak of $0.2581.
This pullback can largely be attributed to Dogecoin’s inability to breach a significant supply zone between $0.24009 and $0.25000. This area has previously acted as a formidable barrier, causing declines in early March. Analysis on trading platforms indicates that bears are slowly gaining dominance in the market, raising concerns among traders.
Resistance at $0.24 to $0.25 Signals Trend Shift
Recently, Dogecoin encountered a swift rejection at the $0.24009 to $0.25000 supply zone, which has shifted sentiment toward a bearish outlook. This situation is particularly evident through the insights provided by various trading indicators that identify this region as a crucial liquidity cluster.
The price movement following this rejection has resulted in the emergence of a bearish engulfing pattern. The daily candlestick chart indicated a series of bearish candles, suggesting that sellers are regaining control after a previous bullish trend. This marks the second rejection from this area, reinforcing the idea that the supply zone remains robust and buyers are not maintaining their momentum above $0.24.
The rejection was notably accompanied by a spike in trading volume, further solidifying the bearish perspective. This trend suggests that Dogecoin might be entering a phase of correction in the near future.
Key Support Levels: $0.19 and $0.14
With the resistance clearly established around $0.25, Dogecoin’s trajectory is uncertain but leaning negative for the time being. Analysts have pointed out two critical support levels that investors should monitor closely.
The first support level of interest is $0.19361. This price zone acted as resistance in April but transitioned to support earlier this month. A decline below this threshold could indicate a significant shift in market dynamics, possibly triggering a deeper correction.
Subsequently, the second noteworthy support area is $0.14915. Located within a high-confluence demand zone, this level has historically seen Dogecoin rebound on two occasions in March. The alignment with liquidity metrics suggests that should Dogecoin approach this area again, it might attract institutional interest, leading to a potential bounce back.
As of the moment, Dogecoin is trading at $0.2171, reflecting a 3.7% decrease in the last 24 hours.
Image sourced from Unsplash, chart sourced from TradingView
