Is it time to short Dogecoin now that it has fallen below a level of support?

In recent weeks, Bitcoin’s price has remained stable on the price charts. The altcoin market saw some bullish momentum on January 4th. Following a downward trend in December, many crypto assets have posted gains in recent days.

One of these coins was Dogecoin. However, the meme coin maintained its bearish bias in the longer timeframes. Since mid-December, trading volume has been steadily declining. Unless DOGE can reclaim $0.078 as support, it is likely that it will continue to fall in the next week or two.

The bullish order block has been breached, here is what can follow

Dogecoin falls beneath an area of support, should traders watch out for further losses?

Source: DOGE/USDT on TradingView

The lower red box on the price chart highlighted a bullish order block which was tested in mid-December. The $0.078 level was flipped to resistance, and DOGE bulls have been weak in the past three weeks.

The session close beneath $0.071 meant that this bullish order block had been flipped to a bearish breaker. The market structure was also bearishly biased and would only be flipped on a move back above $0.0789.

Another interesting factor to consider was that there was a significantly lower timeframe consolidation right beneath the aforementioned resistance level at $0.0789. Therefore it was likely that a move to the $0.077-$0.079 area would offer a low-risk, high-reward shorting opportunity.

The A/D indicator has made higher lows since 19 December, which showed some buying pressure in the market. Yet, no new highs were formed, and buyers were weak. The RSI was below neutral 50 to show that momentum was persistently bearish since the first week of December.

Spot CVD on the rise alongside Open Interest- does this mean bulls have a chance of a breakout?

Dogecoin falls beneath an area of support, should traders watch out for further losses?

Source: Coinalyze

Coinalyze data showed that Cumulative Volume Delta has been on the rise since 1 January. While it is only a few days, it was something for optimistic bulls to cling on to. The slowly rising prices also ushered in an increase in Open Interest and showed capital entering the market.

The funding rate was also positive in recent days to highlight some bullish sentiment on the lower timeframes. Yet, the bulls have not initiated a rally on the higher timeframes yet.

Short sellers could reap profits if Dogecoin continued on its bearish trajectory. The price action and technical indicators signaled more losses could occur, and bulls can wait to see a move past $0.08 before they look to bid.

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