The Fed’s auction of 50,000 Bitcoins is hours away from taking place and the market has already started reacting to it. After enjoying a steady bull run towards 294, the Bitcoin price stumbled a little in last few hours — a part of correction, perhaps. The Dogecoin price, reacting almost inversely to Bitcoin’s price movements, therefore surged notably within the same hours — around 3% against the BTC and 1.5% against the USD. The price previously was on a constant downtrend.
By observing the 1H DOGE/BTC Cryptsy chart above, we can notice the following:
- The Dogecoin price is currently forming higher highs after ditching the previously prevailing downward slope.
- The Dogecoin price is trending above its moving average, right inside a buying zone.
- The RSI is currently above 50; therefore indicating a neutral buying/selling scenario.
We have meanwhile also drawn Fibonacci retracement levels to indicate the following:
- The Dogecoin price has lately tested 51 satoshi twice, near the 23.6% retracement. This level is acting as a temporary downward support.
- The Dogecoin price is testing the 50% retracement level 53 satoshi as its next resistance, followed by an upside risk towards 54 satoshi.
Therefore, the near-term conclusion of the Dogecoin market is neutral, until the upside resistance near 53 is crossed. Price meanwhile continue to test its temporary support near 51 which, if proven invalid, sight 49 as its downside risk.
Moving on to the 1D DOGE/BTC Cryptsy chart, we can notice the following:
- The Dogecoin price is still trending in an oversold territory (near or below the lower Bollinger band); therefore validating the amplifying bearish bias.
- The RSI is near 30; further confirming the selling pressure.
The Fibonacci retracement levels are drawn between last month’s peak value 71 satoshi and this month’s bottom near 49. They are clearly indicating that price is currently testing the upward resistance near 54, after finding its feet near 49. A bullish correction however will only be confirmed when price find a near-term support near 54 and sights the next upside risk around the 38.2% level — aligned with 57 satoshi.
Setting your stop loss near 51 will be a smart choice at this point of time. The strong upside pressure will make it likely to revert Dogecoin towards the previous support points.