- Dogecoin’s market structure is looking positive and there is a possibility of it moving higher next week.
- However, the metrics and trading volume are not fully supporting this positive trend.
Recently, Dogecoin [DOGE] formed a falling wedge pattern, hinting at a potential bullish breakout. Some analysts believe this breakout has already occurred.
Despite these observations, the price has remained steady over the past week, erasing some of its earlier gains.
On the 1-day chart, Dogecoin still maintains a bullish market structure, signaling potential for upward movement. But there are challenges ahead for the bulls.
Volume is a Key Concern
While the market structure appears positive, the trading volume has been lackluster throughout July. Even when prices started to rise mid-month, bullish momentum was limited.
The On-Balance Volume (OBV) also reflects this sentiment with a tepid bounce in July, showing a lack of strong buying interest.
The $0.119-$0.123 range acts as a major support zone, while $0.139-$0.143 presents a significant resistance level. A retest of the $0.12 support could provide a buying opportunity given the current bullish outlook.
Is Dogecoin Undervalued?
Analysis of the mean dollar invested age suggests that investments in Dogecoin are becoming stagnant. Nevertheless, the 90-day MVRV ratio indicates that DOGE is undervalued despite recent gains.
Vocabulary List:
- Momentum /məˈmɛntəm/ (noun): The force or speed of movement; a driving force.
- Structure /ˈstrʌk.tʃər/ (noun): The arrangement of and relations between the parts or elements of something complex.
- Support /səˈpɔːrt/ (noun): A thing that bears the weight of something or keeps it upright.
- Resistance /rɪˈzɪstəns/ (noun): The capacity to withstand or oppose something particularly in financial contexts.
- Analysis /əˈnæl.ə.sɪs/ (noun): Detailed examination of the elements or structure of something.
- Investment /ɪnˈvɛst.mənt/ (noun): The action or process of investing money for profit.
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