DOGE has declined 6.78% over the past week, trading at $0.1667
Analyst Ali Martinez suggests potential rebound to $0.183 if support holds
Recent $6.9 million funding for DogeOS has increased sentiment around the meme coin
US-China trade talks this weekend could impact DOGE’s price trajectory
A falling wedge pattern breakout could push DOGE toward the $0.20 mark
Dogecoin has experienced strong downward pressure over the past week, with the popular meme cryptocurrency trading at $0.1667 as of the latest data. This represents a 3.33% decline over the past day and a more substantial 6.78% drop over the past week. Despite this bearish trend, several factors suggest a potential rebound could be on the horizon.
The price decline has caught the attention of key stakeholders and analysts. Crypto analyst Ali Martinez has pointed out that Dogecoin is testing a key support level around $0.167. If this support holds, Martinez suggests DOGE could rebound toward $0.175 and potentially rally to $0.183.
However, DOGE has struggled to hold above this crucial $0.1667 level for the past three days. This difficulty in maintaining price stability comes amid bearish sentiment and low network activity.
Market sentiment indicators paint a challenging picture for the meme coin. Dogecoin’s Weighted Sentiment has remained in negative territory over the past three days, indicating strong bearishness among market participants. This negative perception has led many traders and investors to take a step back from the market.
Network activity for Dogecoin has also seen a sharp drop. The price DAA (Daily Active Addresses) divergence has remained negative over the past seven days, suggesting that network activity is relatively low compared to current prices. This indicates that Dogecoin’s current price is not backed by actual demand.
Market Dynamics and Technical Indicators
With bearish sentiment dominating, many market players have been aggressively shorting the meme coin. The DyDx Exchange Funding Rate has held within negative territory over the past week, indicating that investors expect prices to drop further.
The downward momentum appears to be strengthening, as evidenced by the declining RVGI (Relative Vigor Index), which has dropped to -0.12. Since making a bearish crossover, the RVGI has fallen strongly to a negative value, reflecting strong downward momentum with the meme coin closing with lower lows.
If this downtrend continues amid strong bearish sentiment, DOGE could fall further and find support around $0.161. For a reversal to occur, buyers would need to displace sellers who are currently attempting to control the market.
Despite these bearish signals, there are some positive developments that could trigger a rebound. Dogecoin has reclaimed the $0.17 mark after a 6% rally overnight, following China’s announcement that it is open to negotiating a trade deal with the U.S. in Switzerland this weekend.
From a technical perspective, DOGE is on the verge of breaking out from a falling wedge pattern. This pattern has formed over the past two weeks as the price trend contracts. The swing lows, starting from April 2022, form the lower boundary line, while the bullish peaks on April 26 and May 2 generate the resistance trend line.
Currently, Dogecoin shows a bullish struggle to overcome the 200 EMA line close to the 61.80% Fibonacci level at $0.1729. The MACD and signal lines have given a positive crossover, hinting at a trend reversal. A falling wedge breakout could potentially push DOGE to the $0.20 psychological mark.
The derivatives market is also showing signs of increased interest in Dogecoin. The DOGE open interest has increased by 1.45% to reach $1.69 billion, reflecting increased trader interest. As bulls gradually dominate the derivatives field, the short liquidation risk grows. According to the DOGE exchange liquidation map, the meme coin could witness a massive short liquidation of $10.96 million if Dogecoin reaches $0.1755.
Recent funding developments have also sparked optimism. DogeOS has secured $6.9 million in funding from Polychain, which has helped boost sentiment around the meme coin. Historically, Dogecoin price trends have shown short-term spikes aligning with sentiment surges, suggesting this recent funding could help push DOGE toward the $0.20 mark.
For the positive price targets predicted by analysts to materialize, Dogecoin may need external catalysts such as favorable macroeconomic reports or positive developments from the upcoming FOMC meeting on May 7, which is expected to keep federal rates unchanged.
The latest price data shows Dogecoin trading at $0.17337303, reflecting the recent 4% bounce as it attempts to reclaim important price levels.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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