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After months of relentless selling, Dogecoin is beginning to stabilize, with DOGE currently attempting to form a bottom around $0.067-$0.070. Although the setup is improving, it would still be too soon to declare a confirmed reversal.
Short-term momentum increases
After consistently defending the same general price range since July, DOGE is currently trading at about $0.0700. Short-term momentum has steadily improved, but the token has entered an increasingly compressed range rather than continuing to produce aggressive new lows. The shortest moving average, which is currently at $0.0711, provides the first positive indication.
The 50-day moving average is only marginally higher at roughly $0.0723, but DOGE is directly testing this level. Regaining both would be the first significant advancement in weeks. Additionally, RSI is improving. The indicator's moving average was close to 43, but it has since recovered to about 45.8. Although momentum is still below the neutral 50 threshold, it is no longer close to the extremely low readings observed during prior sell-offs.
A new uptrend and a bottom are still very different from one another. The 100-day moving average, at roughly $0.0813, is still much higher. More significantly, the 200-day average is still declining and is currently close to $0.0971. Therefore, despite its recent stabilization, DOGE is still below all of the major medium- and long-term trend indicators. There is a fairly clear immediate roadmap.
Dogecoin's biggest challenge
DOGE may be able to challenge $0.075 and ultimately the much stronger $0.081 resistance with a sustained move above $0.072–$0.073. If the latter were broken, the reversal argument would be significantly strengthened. The $0.067–$0.068 region must hold on the downside.
The developing base would be destroyed in a decisive breakdown, exposing the recent lows once more. As a result, Dogecoin looks closer to a reversal setup than it has in a few weeks, but buyers still require confirmation.
Momentum is rebounding, the selling trend has slowed, and volatility has decreased. Maybe DOGE is just getting started. It is still not out of the woods.
InkByte Editorial Team
Dan Burgin
