Will Dogecoin dropping to $0.21 result in an unexpected rebound, or will holders face deeper pain this week?

Key Points

With Bitcoin dropping below $112,000, Dogecoin fell by 5.8%. RSI and OBV show increasing bearish pressure, while the heatmap indicates that $0.24 has broken, with the next liquidity gathering point at $0.207-$0.21.

As of the time of writing, Dogecoin [DOGE] has dropped by 5.81% on Monday, August 25.

Analysis of lower time frame charts suggests that the trading period may become more bearish, especially as Bitcoin [BTC] falls below $112,000.

Since March, Dogecoin has been trading between $0.142 and $0.25. In July, the coin attempted to break through a bullish trend.

Bitcoin reset from $120,000 to $114,700, interrupting the hopes of DOGE bulls for a breakout.

As of the time of writing, the price of Dogecoin has dropped to a median price of $0.196. OBV (On-Balance Volume) is close to the lows from early August, indicating ongoing selling pressure over the past two weeks.

In fact, the contraction of the RSI also highlights that market momentum may shift in favor of the bears.

What will happen to Dogecoin this week?

The cryptocurrency market had a poor start on Monday. As the BTC price fell to $113,600, the market capitalization of altcoins dropped by 4%.

Additionally, Dogecoin failed to hold the level of $0.224. This marks the 75% support level within the previously emphasized long-term range.

Given the recent bearish momentum and selling pressure, the leading memecoin seems likely to retest the support area at $0.21.

A week ago, Dogecoin rebounded from this demand area. The subsequent upward movement was hindered at the critical short-term resistance level of $0.241.

The liquidity heatmap points to the $0.207 cluster.

The two-week liquidation heatmap shows that $0.24 is a strong magnetic area. A breakout here would trigger a bearish reversal.

Additionally, the next notable cluster is located around $0.207.

This is just below the bullish order block highlighted in cyan on the 1-hour chart. Therefore, Dogecoin is likely to drop further.

In fact, if buyers enter again, retesting the range of $0.20 to $0.21 could still pave the way for a rebound.