Memecoin dropped below the crucial $0.1720 level amidst heavy trading volume, indicating a strong seller presence in the London market and putting long-term technical support to the test.
Background on the situation
On Tuesday, Dogecoin saw an additional decline, decreasing by 5.5% from $0.1831 to $0.1730 as negative momentum intensified during the European trading hours. This price movement unfolded within a range of $0.0121, reflecting a clear low-high, low-low pattern.
The downturn picked up pace around 14:00 GMT, with trading volume spiking to 506 million tokens—77% above the daily average of 283 million. Significant selling occurred at the $0.1789 resistance level, prompting the price to cascade through several support points before buyers managed to stabilize it around $0.1719.
Even though there was some stabilization near the end of the session, DOGE lingered close to its lows. Attempts to rise towards $0.1732 encountered immediate selling pressure, but the hourly trading activity of 12.5 million tokens suggested a trend of distribution rather than accumulation.
Price fluctuation overview
The structure of DOGE’s trading session reflects waning momentum, stemming from weakened support. Its inability to reclaim the $0.1789 resistance confirms a bearish trend in the near term, while the compression around $0.1730 indicates uncertainty among traders in the short term.
The $0.1719 level has undergone multiple retests, establishing a fragile foundation that could guide the next moves for traders. A decline in volume from its peak suggests sellers might be running out of steam, but without any substantial buying to follow, the market still looks vulnerable to further downward shifts.
Technical analysis
With no significant fundamental drivers in play, price movements are primarily technical. DOGE’s dip below its short-term moving average strengthens a broader bearish trend that has been evident since early November. The hourly RSI sits around 38, hinting at a slight oversold status, though not yet at capitulation levels.
Market analyst Kevin (@Kev_Capital_TA) points out that the weekly 200-EMA around $0.16 serves as a structural “line in the sand” for Dogecoin. This level has held steady over the last six retests since summer, acting as a dividing line between a cyclical rebound and a long-term trend reversal.
If the price closes decisively below $0.17, it would definitely shift market sentiment to bearish. However, maintaining support above $0.1720 could facilitate short-term consolidation or even a slight rebound towards $0.1760.
Essential info for traders
The immediate concern is whether the $0.17 level can withstand ongoing pressure. Indicators suggest a systematic aversion to risk in the institutional order flow, rather than panic selling. This opens the door for a potential technical rebound if trading volumes further decline. A breakdown of the $0.1720-0.1719 support range might reveal the $0.1650-0.1600 area, where the weekly moving average may act as the last line of defense.
