Dogecoin [DOGE] pulled back 19% last weekend, providing a good opportunity for buyers. Retail interest has revived, evidenced by a surge in new on-chain addresses. Despite the strong bullish sentiment, it may still face a deeper pullback. The narrowing MVRV ratio indicates that this meme coin is still undervalued.
Although Dogecoin has pulled back for a week, it has rebuilt a bullish structure on a lower time frame.
The 1-day chart shows that Dogecoin is in a bullish trend but accompanied by a slight pullback. The OBV indicator shows that although it is in an upward trend, there is significant selling pressure at the $0.26 pullback, causing the OBV to drop below the late February low.
The breakout of this level at the beginning of May was seen as a bullish signal, but profit-taking activities have had an impact. The RSI remains above 50, indicating bullish momentum. The Fibonacci levels on lower time frames show that Dogecoin is supported at the 50% retracement level of $0.212.
On the 4-hour chart, the maintenance of this pullback level coincided with the breakout of a bullish market structure. The breakout of the recent lower high of $0.229 (green marker) reversed the bullish market structure, benefiting buyers.
However, the OBV has not yet broken through the high point of May 16. Therefore, the shift in the bullish structure is accompanied by weak buying volume. Subsequently, the price may drop again to $0.212 or lower.
Coinglass's long-short data shows that the buy/sell volume for market takers is almost equal. Therefore, from the trading volume perspective, market sentiment appears balanced and unbiased in the short term. Account data also shows that long traders account for 75% of the total accounts, which is a very high percentage. The situation has been the same for the past month.
Dogecoin's current price is $0.21, and recent trends show it has entered a high-demand area and broken through a short-term bearish structure, creating higher highs, suggesting a short-term bullish outlook.
Recommendation: Focus on the $0.235-$0.24 resistance breakout in the short term. After breaking through, consider going long, with a stop loss set below $0.20. If a long-term breakout is confirmed, hold until the target of $0.95, gradually taking profits.
