In our previous Dogecoin review, we talked about how Doge was finding upward momentum after bouncing from $0.22, and how the memecoin was likely going for a retest of its yearly resistance at nearly $0.28.
Well, Doge buyers gave their best shot at breaking that level. Since that last article, $DOGE moved upward by nearly 6% in value… that is, before facing a major sell-off. You see, while Dogecoin, alongside nearly all top currencies, was riding high on momentum, things took a turn for the worse after macroeconomic data scared investors away from risk investments.
This week’s PPI report revealed a significantly more inflationary scenario than previously expected. Anticipating tighter monetary policy and an overall risk-off sentiment, investors fled the scene, prompting nearly a billion in long positions on that date.
As a result, Dogecoin faced a massive wave of short selling, causing the currency to drop from $0.255 to as low as $0.217, losing 13.88% in value in the process. $DOGE eventually found its footing at $0.211 support, and from there onward, buyers have been able to inch back into the green.
Now, the $0.234 zone, which served as support earlier in the week, providing footing for another bullish breakout attempt, turned into a ceiling as investors appear weary of going on another spree.
Dogecoin is now showing signs that it may trade sideways for a while. That is, before volume picks up and moves the price one way or the other. As far as momentum goes, choosing between bulls and bears seems like a given. Despite the drop, RSI shows that $DOGE price went nowhere near ‘oversold’ levels.
To display how uncertain the Doge market has become this week. The 1-hour MACD indicator shows a whopping 6 crossovers over the past three days. Meanwhile, the 1-day MACD shows that bulls could be fading only a week after flipping the histogram green.
Overall, traders appear to have taken a step back and allowed macro to take the wheel for a while. While no major inflationary prints are coming out next week, Tuesday’s Fed Minutes could certainly move markets, particularly if FOMC members show signs of interest rate cuts by the next meeting in September.
Also, let’s keep an eye out for institutional moves. Dogecoin, following the steps of Bitcoin and Ethereum, appears to be generating some heat at the institutional level, and upcoming news of broader institutional adoption could also spark interest back into the market.
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