Disclaimer:Â The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice
The 61.8% Fibonacci resistance played out expectedly for Dogecoin (DOGE) after its price suffered a nearly 19.4% decline over 12 days. Sellers were quick to pull back the price point below $0.148.
As the buyers start building up pressure at the 38.2% Fibonacci resistance, the price action could see an extended tight phase before a bull run. At press time, DOGE was trading at $0.1444.
DOGE Daily Chart
Source: TradingView, DOGE/USD
The alt’s latest breakdown from its 200 EMA (green) pushed the price back towards the critical price level of $0.13. This fall was preceded by a revival from its four-month down-channel (white) breakout rally. The corresponding growth entailed a bullish crossover of the 20 EMA (red) with the 50 EMA (cyan). Thus, revealing a gradual increase in buying force over the past month.
As the price traded around its near-term moving averages, the price would likely break into high volatility in the coming days. In the best-case outcome, a comeback above $0.14 would lay the foundation for a rally towards the $0.16 and $0.17-range. To top it up, the Supertrend kept its bullish position intact whilst the moving averages tilted north.
Conversely, the inability to find a close above the 38.2%-level after multiple retests could cripple recovery hopes. Especially towards the long-term bullish target of $0.17.
Rationale
Source: TradingView, DOGE/USD
Despite the recent pullback, the Relative Strength Index swayed above its equilibrium. Any retracements could find support near its trendline support. In such a case, the alt could see a near-term lapse before a gradual recovery on its charts.
The OBV accommodated higher peaks whereas the price action took a plunge on its peaks in the last 11 days. This trajectory revealed a hidden bearish divergence. Thus, the buyers could find it difficult to propel an unrestrained rally in the coming days.  Â
Conclusion
Giving due importance to the bearish divergence on the OBV and the 38.2% Fibonacci resistance, DOGE could see a setback in the short term. However, the movements of its near-term moving averages keep up the long-term recovery hopes alive.
Even so, the dog-themed coin shares a 33% 30-day correlation with the king coin. Thus, keeping an eye on Bitcoin’s movement would complement these technical factors.
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