DOGE/USD has seen selling pressure mount since last night and the cryptocurrency is traversing support levels not tested in one week. On June the 2nd, DOGE/USD made highs of approximately 44 cents, but the day before, on the 1st of June, Dogecoin was trading near 31 cents. While bullish speculators may see this opportunity as a way to buy into the market and look for reversals now, they might want to think twice before stepping in that direction.
The broad cryptocurrency market took a negative turn yesterday when many of the major digital currencies failed to challenge short-term resistance levels. What may make the selloff in DOGE/USD more ominous for technical traders is that the downward move last night appears to have seen increased volume, meaning Dogecoin holders may be getting nervous as support proves vulnerable. Also, after the move downwards, there was not a big reversal upwards, and a range near the current price of 32 cents was established. This may lead some speculators to believe that if DOGE/USD merely consolidates around this price, another leg down could develop.
The month of May often delivered bearish volatility. DOGE/USD traded near a low of 21 cents on the 19th of the month. Yes, Dogecoin was able to traverse higher and touched the 43 to 44 cents mark the following day. But the 44 cents level has proven to be substantial resistance since then. The last time DOGE/USD traded near this ratio was on the 4th of June. Since then, Dogecoin has produced an incremental decrease in value.
The 31 to 29 cents junctures are within plain sight and if they should prove vulnerable the next logical bearish target could prove to be 26 cents. Traders need to remain conservative regarding the amount of leverage they are using when taking DOGE/USD positions, and the use of stop-loss and take-profit orders are urged.
Technically, DOGE/USD does look vulnerable, and if current support levels are punctured, traders may anticipate another storm downwards. DOGE/USD may prove to be a worthwhile selling wager on small moves higher which activate limit orders to short the cryptocurrency. Until DOGE/USD proves it can break its current resistance levels, the short-term perspective remains bearish.
Dogecoin Short-Term Outlook:
Current Resistance: 0.34390000
Current Support: 0.31250000
High Target: 0.37320000
Low Target: 0.26870000
