Dogecoin [DOGE] was trading at a key long-term support. Marked as a “historical bottom channel”, a crypto analyst pointed out that DOGE around the $0.1 mark might be a long-term market bottom.
The memecoin sector has been extremely weak in recent months. The sentiment across the rest of the market remained bleak. Experts forecast the bear market to last until Q4 2026, and possibly longer.
The long-term Dogecoin market bottom might or might not be in, but in the short-term, a minor price bounce can be expected. This would hunt the cluster of short liquidations overhead before reversing.
Short-term Dogecoin forecast
The 6-hour chart showed that a bearish trend was predominant for the leading memecoin. Over the past week, a bounce to $0.1 was met with a setback to $0.0885. This retracement tested the session close from the crash on Friday, the 6th of February.
There was reason to believe that Dogecoin is headed higher to collect the liquidity overhead before a bearish continuation. A recovery is unlikely because of the longer-term structure and the lack of demand that the OBV highlighted.
The Fibonacci retracement levels plotted for the recent H6 swing move showed that $0.0989 and $0.1040 were the key resistance levels. A retest of the latter level is expected in the coming days.
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On the 1-hour chart, the internal structure did not flip bullishly during the recent price bounce. The $0.094 level remained a local resistance, but it will likely be overcome soon.
The hourly RSI was back above neutral 50. Furthermore, the defense of the $0.00885 support and the higher low formed in the past 24 hours at $0.091 supported this idea.
Traders must wait for the bounce, then sell
The liquidation heatmap from the past two months indicated that a price rebound beyond $0.10 was likely. In particular, the $0.11 level, where local highs were set in early February, showed a large cluster of short liquidations.
At present, it was not an attractive risk-reward setup to go long or short. A bounce is not guaranteed. At the same time, a Bitcoin [BTC] crash below $62k will lead DOGE to new lows and make the drop to $0.1 bounce much less likely.
Final Thoughts
- The Dogecoin trend remained bearish, but the defense of the $0.088 local support hinted at a brief respite from selling pressure.
- Traders should not be looking to go long, though a price bounce appeared likely. Instead, they should be looking to sell the bounce.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
