Dogecoin [DOGE] witnessed an increase in onchain activity recently. It was reported that both the Daily Transfer Volume and the Transaction Count numbers were elevated, but failed to translate into any notable price gains.
This was likely because DOGE was going through a distribution phase.
AMBCrypto reported that whale flows into exchanges translated into immediate sell pressure. This pushed prices further toward the month-long range lows at $0.0887.
What can happen at the Dogecoin range lows?
Generally, one would expect a bullish reaction at the lows of a range.
At the same time, the market sentiment was once more in extreme despair. Worries of escalation in the US-Iran conflict and a worsening energy crisis have already sent Asian stock markets reeling.
Bitcoin [BTC] faced profit-taking pressure and has slumped below the $70k psychological support. In these settings, Dogecoin bulls will have a tough time sparking a price rally.
The range extended from $0.0887 to $0.104, with the mid-point at $0.0965. The $0.088 area has had added importance as a support level since the first week of February.
The RSI on the 4-hour chart was at 35, indicating bearish momentum was prevalent.
On the other hand, the CMF was at +0.01. It had climbed higher within the past week to signal easing capital outflows as the price approached a key local support.
It is unclear if this is enough for the bulls to initiate a move toward the range highs. It would depend on Bitcoin and the crypto market sentiment, which also hinges on the global investor sentiment.
Traders’ call to action- Brace for a sweep of the local lows
The 3-month Liquidation Heatmap showed that the $0.084-$0.088 was a nearby cluster of long liquidations. They have built up over the past three weeks and could pull prices lower.
Such a liquidity sweep, combined with the range lows as support, could give DOGE a platform for recovery. On the other hand, a slide below $0.086 would make the bulls’ position more tenuous.
Final Summary
- Dogecoin swiftly approached a key local support as the crypto and stock markets experienced extreme fear.
- The combination of the month-long range lows and a cluster of long liquidations could see DOGE prices pushed to $0.086 soon.
