Key Takeaways
Why did Dogecoin experience a sharp price drop?
Over the past 24 hours, DOGE has fallen 5.2% and lost the apparent safety of the $0.18 support level, following Bitcoin’s correction to $104.1k.
Where could the current bearish move end?
The next support levels for Dogecoin are at $0.15 and $0.13, but traders should be prepared for a deeper correction if BTC loses the psychological $100k level.
Dogecoin [DOGE] whales bought 15.1 million DOGE, worth $2.9 million, last week. However, retail participants were selling at the same time, and the $0.2 resistance level remained resilient.
In a recent report, AMBCrypto observed that DOGE was trading at a vital support level, but faced overwhelming selling pressure. The OBV had dropped substantially, reflecting overwhelming selling, and the buyers were barely holding on.
The Bitcoin [BTC] volatility on the 3rd of November that took prices below the $108k level sent Dogecoin reeling.
At the time of writing, the leading memecoin was trading at $0.161, losing the $0.18 demand zone.
Of course, Bitcoin’s decline toward $100k extended losses across the entire market. How much further will DOGE fall?
The OBV illuminates the upcoming Dogecoin trends
Source: DOGE/USDT on TradingView
The 1-day timeframe showed that the Dogecoin bulls had a tenuous grip on the $0.18 support zone. In fact, the most recent Bitcoin correction tipped DOGE prices over the edge.
Such a move was predictable based on the OBV.
The OBV made a new low in the second week of October, falling lower than it had reached in the previous three months. This was an early sign that the bulls had lost the battle.
On top of that, the Awesome Oscillator also formed a bearish crossover to indicate downward momentum following the 10/10 crash.
There was no fightback from the buyers. Instead, selling pressure and fear continued to lead the way, finally sending DOGE below $0.18.
Liquidation data points to further downside
Source: CoinGlass
Meanwhile, CoinGlass’ Liquidation Heatmap showed that, over the past week, the price had fallen lower, reaching the long liquidations.
Dogecoin hovered at a price level, building up liquidity overhead before tagging it and dropping lower. Examples were the price action on the 28th-29th of October and the 1st-2nd of November.
If this latest pattern is to repeat, DOGE could climb toward the $0.172 pocket, meander just below it for a couple of days, briefly test it, and fall lower once again. The pattern might not play out again, but it is something traders can watch out for.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
