Dogecoin (DOGE) has been consolidating within a horizontal channel since August 8. In the past few days, it approached the resistance level and made a move to surpass it. However, things did not go as the bulls wanted, and a negative divergence between price and trading volume was observed, which could prevent the breakout.
Dogecoin Analysis
The general movement of the asset within a horizontal channel indicates stagnant price action due to uncertainty in buying and selling. Since August 8, DOGE has encountered resistance at $0.11 and found support at $0.09. The recent price increase towards the resistance line was seen as a 4% price increase over seven days.
Despite the price increase, daily trading volume fell by 37%. As a result, a negative divergence between price and volume was observed. This situation indicates a lack of strength for a rally, potentially leading to a price drop.
In a healthy upward trend, a price increase is generally supported by an increase in volume, indicating more participants are buying the asset. However, a drop in trading volume during a price increase indicates weakening buying momentum. This situation may suggest that the rally is supported by a limited number of investors.
Given the absence of whale activity in the market, it would not be wrong to say that DOGE is at risk of a downward trend. According to data provided by IntoTheBlock, a 100% drop in net flow of whales indicates that this group has refrained from trading over the past week.
How Much Will DOGE Be Worth?
Despite the negative divergence between DOGE’s price and daily trading volume and the decrease in whale activity, it continues to rise interestingly. In this context, the DOGE/TRY pair is seen at 3.62 TL.
On the other hand, DOGE has moved horizontally over the past few weeks. The points of the Parabolic Stop and Reverse (SAR) indicator have remained below the price level since August 10.
If DOGE potentially breaks above the upper line of the horizontal channel, the price could exceed $0.11. Conversely, a downward price movement could see a drop back to the $0.09 support and potentially retreat to $0.08.
