Dogecoin received a major setback over the weekend as the cryptocurrency failed twice in its attempts to scale Mt. 51 Satoshis. Any surge towards the peak was quickly pulled down by the bears beating the bulls hollow.
The current value of each Dogecoin is 48 satoshis.
I had mentioned in my earlier analysis that the onus lies on bulls to maintain the positive momentum but, as can be seen, the bears had the last laugh. After technically analyzing the 240-minute Dogecoin/Bitcoin price chart, it can be advised that only short positions should be considered on rallies.
Chart Structure – In April, Dogecoin has faced severe pounding by the bears on at least 4 occasions (marked in the chart) upon reaching 51 satoshis. The cryptocurrency, however, is maintaining a strong base around 46 satoshis. With repeated attempts by bulls failing miserably, traders should only look to build short positions on rallies.
Bollinger Bands – The chart clearly reflects that any attempt to breach the upper range of the Bollinger Bands has resulted in a huge disappointment for the investors. Dogecoin is now trying to stay close to the current 20-4h simple moving average of 47.5 satoshis.
Relative Strength Index – In a move comforting to the investors, the RSI indicator is crawling its way up – the latest value is 53.1660. A rise in the strength reading may coerce the sellers to trim down their positions and lead to price gains.
The analysis above clearly points out that the bears are in a commanding position at the moment, and that bulls must act sooner than later to avoid a major disappointment. Any rise towards 50 satoshis could be utilized to go short in Dogecoin with a stop-loss placed above 51 satoshis for a target of 47.5 satoshis. The risk-reward ratio of 1:2.5 is then skewed in favor of the market participant.