Disclaimer: The information presented does not constitute financial, investment, trading or any other advice and is solely the opinion of the author
The market structure has turned bearish recently. Momentum was firmly on the side of the bears
Since Dec. 5, the USDT (Tether) Dominance metric is up from 7.94% to 8.26%, an increase of nearly 4%. This showed that market participants were fleeing from holding crypto to holding stablecoins. Dogecoin hit a local high at $0.1119 on December 5.
Read Dogecoins [DOGE] Price Forecast 2023-24
Over the course of the next week, the idea of another drop was supported by both the price action and technical indicators. If Bitcoin also sees weakness in the coming days, fear could grip the market and Dogecoin could hit the lows from November.
Dogecoin offers the possibility of a bearish move, traders can wait for the trigger to take positions
The red box at $0.089 marked a bullish order block formed on November 26. It was tested on November 28 and saw a sharp bullish response from DOGE. The price rose to $0.11, a move of almost 22%.
The past few days of trading saw Dogecoin dip below the $0.094 support level and retest the order block. However, the candlewick to $0.085 in the past few hours was not an encouraging sign. It indicated that the bulls might have lost the battle.
In the next day or two, a move below $0.0888 followed by a retest of the $0.089 area may present a selling opportunity. The previously bullish order block would have turned and become a bearish breaker. Sellers can take profit of $0.083 and $0.073. Meanwhile, the invalidation of this bearish idea would be a step back above $0.09.
This transaction was relatively low risk. The drop in the Relative Strength Index (RSI) below the neutral 50 recently showed that a downward move was likely. The On-Balance Volume (OBV) also gradually decreased over the past week.
The dormant circulation statistic saw sharp peaks on November 10 and July 21. Both times, the peak was chronologically close to a major price move on Dogecoin. However, since the peak in November, another had yet to appear, although DOGE recorded large losses in recent days.
The 30-day market value to realized value (MVRV) has been a more reliable indicator of local highs in recent months. The increase past 10% has happened three times since July and was followed three times by a sharp drop in prices. At the time of writing, the MVRV was back in negative territory, but this may not be an indication of the end of a short-term downtrend.
A retest of the bearish breaker, if it occurs, could be a trigger for short sellers. News in the broader economic sphere and global indices could also impact crypto market performance over the next two weeks.
This post Dogecoin traders can take short positions if this scenario occurs
was published first on https://ambcrypto.com/dogecoin-traders-can-enter-short-positions-if-this-scenario-plays-out/