Dogecoin, the memecoin darling, continues to face a barrage of bearish pressures. The cryptocurrency’s price has stalled, and ominous signals from the futures market are compounding the woes.
Futures open interest, a measure of speculative activity, has plummeted for Dogecoin. This decline signifies waning investor confidence and a growing inclination to liquidate long positions. Consequently, the price of Dogecoin has mirrored this bearish sentiment. To exacerbate matters, the OI-weighted funding rate has dipped into negative territory. This metric indicates a preponderance of short positions, as traders anticipate further price declines. Unless a dramatic shift occurs, Dogecoin is likely to remain under pressure.
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Dogecoin Price Rejected at Key Resistance
On the price charts, Dogecoin’s recent performance has been lackluster. The cryptocurrency failed to capitalize on a brief surge in mid-August, succumbing to a 5% decline.
A critical resistance level near $0.11 has proved insurmountable for Dogecoin. Overcoming this hurdle would have paved the way for a potential rally towards the 50-day EMA, situated around $0.12. However, the absence of robust buying pressure suggests that such a scenario is unlikely in the near term.
Conversely, if Dogecoin loses its current footing, support levels at $0.098 and $0.091 will be put to the test. A breach of these levels could trigger a more pronounced downward spiral.
Technical Indicators Offer Little Hope
The relative strength index (RSI) currently hovers around neutral territory, providing no clear directional bias. Nonetheless, the overall market structure remains bearish, reinforcing the expectation of continued downward pressure.
While the RSI is not oversold, indicating potential for further declines, the prevailing sentiment suggests that Dogecoin faces an uphill battle to regain its footing.
Conclusion
Dogecoin is caught in a bearish vise, seeing both fundamental and technical factors working against its possibility of a rally. The cryptocurrency’s failure to overcome key resistance levels, coupled with the ominous signals from the futures market, has cast a long shadow over its prospects.
Unless a significant catalyst emerges to shift market sentiment, the memecoin is likely to remain under pressure in the short term. Investors should exercise caution and monitor developments closely.
