Dogecoin has been on the rise for most of Wednesday, reaching levels last seen in February. It continues its uptrend after it gained almost 2% the previous day.
Over the last 24 hours, the asset broke above its 30-day high in the early hours. It continued to rise, breaking above $0.11 and peaking at $0.111.
However, it soon succumbed to the growing bearish sentiment across the market, leading Bitcoin to retrace to $74k and the global cryptocurrency market cap to slip below $2.50 trillion.
Dogecoin shed over 4% in the previous 4-hour session, but selling pressure is currently dwindling. Nonetheless, at its peak, the asset was up almost 12% from its opening price. Additionally, amid the decline, it remains above $0.10.
While some traders were surprised by the recent hike, a previous analysis predicted it. It cited the bollinger bands as the reason for concluding the memecoin will retest $0.10, noting that it was bound to continue its trend between the lower and upper bands. Following the surge, futures opening interest jumped 28% to $1.81 billion, the highest since October.
Nonetheless, fundamentals also played a vital role in the recent surge. The rally started shortly after 21Shares launched a physically backed DOGE ETP on Germany’s Xetra. The move marks a major milestone for the memecoin, as it opens it up to a new market.
However, the sudden price jump and sharp decline raise more questions. One of the biggest is whether the coin will continue its uptrend on Thursday.
Dogecoin to Fill FVG
Dogecoin lost almost all of its gains a few hours ago. As a result, it created a fair-value gap spanning $0.101 to $0.111. Under normal circumstances, it will fill this gap between Thursday and Friday. This means that an attempt at the current high is likely this week.
Meanwhile, a closer look at previous price movement suggests flipping the resistance is unlikely. This is not the first time the altcoin has faced rejection at the peak. In early February, it failed to break the mark, resulting in a significant decline.
It also edged closer to the barrier in the later part of that month, with the same result. Given this precedent, it is safe to conclude that there is strong selling congestion at the mark.
Aside from previous price movements, indicators are also negative. For example, the relative strength index surged above 70 a few hours ago. It is currently at 63 following the rejection. While it trends significantly below its high, further price increases will make the asset overbought again.
In a nutshell, RSI warns that the uptrend will end this week and massive declines will follow in the coming week.
Additionally, DOGE broke out of the bollinger bands. During a recent breakout, it traded around the upper band for an extended period before the retracing. The current readings complement those from RSI, both of which indicate the uptrend will end this week.
In summary, Dogecoin may retest its current high, but flipping it is unlikely. Additionally, it may retrace in the coming week. The BB suggests its next direction will be the $0.096.
Get Trending Crypto News as It Happens. Follow CoinTab News on X (Twitter) Now
