Dogecoin Tests Critical Support After Buenos Aires Tax Payment Integration
Market Structure Shifts Lower
- Price at $0.143, up 5% intraday, down over 20% for the month
- RSI ticking back toward 30, widening divergence with momentum
- Buenos Aires adoption event failed to halt the 20% monthly decline
The price of DOGE was $0.143, up as much as 5% on the day, but still down over 20% for the month. Like other cryptocurrencies, DOGE has seen the price cool over the past few days, with RSI beginning to tick back towards 30 – widening the divergence with momentum.
Dogecoin suffered a brutal monthly 20% decline, dropping from $0.179 to current levels near $0.143, despite Buenos Aires accepting DOGE for local tax obligations, a precedent-setting adoption event that could not halt the selloff. The meme coin lost approximately $0.036 in a month, scrubbing the YTD accumulations since early October clean despite meeting the newsworthy-use threshold of municipal administration. The Buenos Aires event and technical oversold readings will serve to test relief-bound buyers against the constructive momentum level. The primary question for traders now is, will Buenos Aires and technically oversold conditions ignite a relief bounce, or do sub-$0.123 prices beckon?
| Metric | Value |
|---|---|
| Asset | DOGECOIN (DOGE) |
| Current Price | $0.14 |
| Weekly Performance | -2.32% |
| Monthly Performance | -20.02% |
| RSI (Relative Strength Index) | 42.2 |
| ADX (Average Directional Index) | 41.0 |
| MACD (MACD Level) | -0.01 |
| CCI (Commodity Channel Index, 20-period) | -58.43 |
Momentum Exhaustion Signals Capitulation Phase Near Completion
The Relative Strength Index (RSI) is an average momentum oscillator that measures the speed and change of price movements in a security and it surprised to the downside indicating that sellers are overdoing it again so again. The latest configuration marks the fastest transition from an RSI of 54 to oversold (below 45) since last August, which led to a 45% recovery rally with two similar occurrences leading to significant price increases as well.
Therefore, we have a few scenarios here. Bears are looking for another clear break of the support line ($0.36) to send price levels down to the previous lower low below $0.30 or even back to yearly lows towards $0.20. Bulls are expecting a dead cat bounce to at least the first resistance zone ($0.46-$0.50), while hoping excitement around Bueno Aires would push us back into the high $0.50s to low $0.60s candle body rejection zone.
ADX Above 40 Confirms Mature Downtrend Nearing Exhaustion
When we consider RSI has reclaimed 40 for the first time since the bear trend began in early May, we can imply a slight bullish momentum divergence, but in reality, the series of lower highs since early May remains intact. The flip side offers a 53 RSI resistance level from June 1, as well as: the 200-day moving average.
In other words, the increased ADX indicates that the asset is likely already quite oversold due to the extreme negative sentiment. This doesn’t mean that additional losses can’t ensue; prices can always go lower, especially given the current macro headwinds. It simply suggests that the high amount of panic and fear may have already been largely priced in, reducing the incremental selling pressure, at least until more fear-mongering news hits wires.
20-Day EMA at $0.149 Becomes First Resistance Target
The price trades below the entire EMA ribbon first time since October. The 10-day EMA @ $0.144 will offer the first resistance 0.7% above the market. The 20-day EMA @$0.149 and 50-day EMA @ $0.154 are pinched closely together in a resistance cluster between 0.149–0.154, offering the strong overhead resistance that bulls must overcome to change the short term configuration. However, the significant aspect here is how the 100-day EMA @$0.166, roughly 16% above the market, has been converted to the major resistance.
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Support Builds at $0.143 After Six Tests Since December
Buy-the-dip mentality appears to be spreading, raising odds for a trading range into the fourth quarter. However, structural issues will keep a lid on gains for months, with the heaviest supply since 2018 unrivaled until token prices double or triple in value. It has historically taken substantial rally fuel to top that barrier and generate sustainable upside, making it tough to stay on the sidelines in the coming weeks and months.
Looking at the downside, it’d be hard to ignore the countless holds of $0.143 levels, coupled with the round number aspect, followed by December’s $0.132 low as a midway prop before the pre-breakout $0.123 zone of the monthly S1 pivot and the 200-week EMA potential confluence. Weekly S1 located at $0.156 is followed by the prior support-turned-resistance of the 50-day EMA.
The setup resembles a compressed spring between $0.143 support and $0.154 resistance, with the Buenos Aires news potentially serving as the catalyst for directional resolution. The technical setup favors bears so long as price sticks below the EMA cluster, although oversold reads and fundamental news keep a dip-worthy bias into fresh shorts at this stage of the rally.
Bulls Need Daily Close Above $0.154 to Spark Relief Rally
If the price is able to recover the 50-day EMA at $0.154 on a daily closing basis, it could open the way for a test of the monthly pivot at $0.156 first, followed by the 100-day EMA at $0.166, although the latter barrier might be hard to crack. On the downside, initial support lies at the June 21 low of $0.140. A break lower would expose the bear market low of $0.117.
The setup will be negated if DOGE spikes on massive volume, powering through resistance and back-testing the breakout point on increased volume before returning to range trading. This volatile price action would demand aggressive stop-losses on longs and new shorts, while adding even more uncertainty to the Buenos Aires event.
Based on the extremely oversold technical conditions, DOGE may consolidate for a few more days, but the persistent lack of identified support levels leaves little to no cushion before a probable retest of 2022. Should 2022 fail to hold as support, more ominous projections could finally be realized. The current low-risk, high-probability set-up for aggressive speculators is to short any intraday rallies using the high of the session as the immediate level of risk.
