Dogecoin (DOGE) price spiked 20% over the past week as markets reacted to Elon Musk’s decision to switch from Twitter to X. As the DOGE price now loses momentum, where will it find support?
On June 23, Elon Musk announced in a tweet that the social media giant Twitter would switch its name to X. The billionaire’s affinity and influence within the DOGE community have been well-documented in recent years.
This time, the markets responded positively as investors looked to front-run a potential upside for DOGE amid the sweeping changes implemented at Twitter. A week later, as the hype cools, on-chain data suggests that Dogecoin’s price has lost momentum.
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Dogecoin Bears Have Seized the Momentum
According to the Relative Strength Index data, the Dogecoin bears appear to have seized momentum once again. After racing to euphoric highs in the aftermath of the Twitter name change, DOGE RSI has dropped below the critical 70 mark from above, hitting 61.29 as of July 28.
The Relative Strength Index data evaluates the strength and momentum of an asset’s price trend. When the RSI corners below the 70 level from above, it suggests the underlying asset is facing growing bearish pressure and could be due for a price correction.
Strategic investors may interpret this as a signal to take bearish positions on DOGE in the coming days.
Traders are Looking Out for Short-term Profit Oppurtunities
Furthermore, Dogecoin traders appear to be actively seeking out short-term opportunities to sell their coins. In confirmation of this bearish outlook, IntoTheBlock’s Exchange On-chain Market Depth chart shows that the bears have started mounting sell-walls.
As illustrated below, the bears have placed active orders to sell 193 million DOGE, 30% above the current prices. Meanwhile, that is significantly higher than the 170.93 million DOGE orders placed by the buyers. This means sellers may have to compete by lowering prices to fill their orders.
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The Exchange On-chain Market Depth shows the current price distribution of aggregate buy and sell limit orders placed for an asset across recognized crypto exchanges.
As seen above, the momentum between the buy and sell orders and the DOGE price momentum is tilted in favor of the bears.
In conclusion, considering the bearish technical readings from the RSI data, the sell-walls could grow much-higher across exchanges in the coming days.
DOGE Price Prediction: The Bears Could Target $0.070
As the Dogecoin price loses momentum, the $0.075 support level could be critical to avoiding a prolonged downtrend. However, as shown below, the 217,000 investors had bought 23.8 billion DOGE at the average price of $0.074. Once the price approaches that territory, they will likely offer bullish support to avoid slipping into a net-loss position.
But if the bearish momentum grows, as highlighted by the RSI data, Dogecoin could retrace toward $0.070
Yet, the bulls can regain control if Dogecoin can rebound above the $0.080 resistance. However, the 143,000 holders that purchased 9.14 billion DOGE at the average price of $0.080 can repel the rally.
But if that sell-wall cannot stand, then Dogecoin price could head toward $0.085.
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