Dogecoin (DOGE) has recently demonstrated a positive performance in the cryptocurrency markets. On Friday, August 23rd, the digital asset surged by 7.3%, signaling a bullish intent that could potentially lead to an additional 8%-18% price increase in the near future.
An increasing number of Dogecoin wallets were "in the money," suggesting that profit-taking could soon emerge and potentially slow Dogecoin's progress, particularly as the market has been in a bearish trend since May.
Dogecoin Converts Local Resistance into New Support Zone
The market structure on the daily chart turned bullish following a daily session close above $0.111 on August 23rd. Despite this, the longer-term trend remains bearish, with occasional bullish structures like the recent uptick.
Fibonacci retracement levels based on last month's price decline highlighted $0.1196 and $0.13 as the next resistance zones. Given the current bullish structure, Dogecoin could potentially reach one or both of these levels.
The daily RSI is above the neutral 50 mark, signaling bullish momentum. However, the On-Balance Volume (OBV) has not shown a significant increase, indicating that while momentum is shifting, a lack of demand could make Dogecoin's gains easier to reverse.
Short-Term Bullish, Long-Term Uncertainty
The funding rate for DOGE experienced a decline over the past few days but remained positive. The Open Interest also rose alongside the price, signaling bullish momentum, although it did experience a minor dip in the last 24 hours. During this period, Dogecoin fell just over 4%, dropping from $0.1149 to $0.11.
Despite futures data indicating that speculators are willing to go long, the spot Cumulative Volume Delta (CVD) has started to trend downward again. This signals weak buying activity in the spot markets and supports the notion that Dogecoin's gains could be easily erased if bearish sentiment takes hold.
