Dogecoin [DOGE] fell by 2.6% in a day and was down 6.5% over the week. During this period, the memecoin sector collectively shrunk by 8.4% in market cap. In fact, the memecoin sector has underperformed Bitcoin [BTC] and Ethereum [ETH] by a significant margin this week.
Down 15% so far in October, and with uninspiring ETF flows, there didn’t seem to be much reason to expect a Dogecoin revival at press time.
Price structure breakout failure: Warning or opportunity?
The 1-day timeframe’s swing structure was bullish and had already retraced to the 61.8% Fibonacci retracement level back in September. The memecoin pushed higher once again, but was unable to close a daily session above the $0.1008 high made in August.
The subsequent retracement back to $0.08, where the price was at the time of writing, may be a warning sign.
The A/D decline and the negative CMF readings confirmed selling pressure over the past two weeks. Combined with the failure to establish a bullish structure continuation, it could be a worry for the bulls.
Hence, the odds of a price decline, or a range formation from $0.08-$0.10, appeared greater than a bullish trend revival.
Reasons to stay bullish on DOGE
According to popular crypto analyst Ali Martinez, the UTXO Realized Price Distribution (URPD) data showed 36 billion Dogecoin tokens traded around the $0.081-level.
This made the local lows that much more important as a demand zone. There is no guarantee buyers will defend this level, however.
Other pieces of evidence the analyst presented were the 600 million DOGE whales have bought since 12th October, and the cost basis distribution heatmap also highlighting $0.081 as the level to hold.
If defended, a bullish rebound could target $0.108-$0.121 next. Further north, the $0.16-$0.17 areas will be important long-term supply zones that could be difficult to clear due to profit-taking.
Final Summary
- Dogecoin’s price structure was bullish on the daily chart, but failure to confirm a bullish continuation was a warning sign.
- The $0.081 support level is pivotal, both on-chain and also as a local support zone.
