In early May, the price of Dogecoin fell to a low of $0.12, but then recovered from it. Now DOGE is stuck under the $0.16 barrier, but the popular memecoin has the potential to break through this level.
Dogecoin price may rise
The market is seeing a surge in bullish sentiment towards Dogecoin from investors. Open interest (OI) for the coin increased by almost $200 million in two days. Open interest is the total number of contracts currently open for various derivatives such as options and futures . The indicator reflects the activity of market participants and liquidity.
Theoretically, an increase in OI could also be associated with an increase in the number of short contracts. However, given the positive funding rate, it can be assumed that there is now an increase in long contracts.
The rally could begin soon as, despite the recent recovery, Dogecoin still has significant room to grow. Of the total circulating supply of DOGE, only 83% is in profit. As a rule, rising profits indicate possible sales. However, this happens when the asset makes a market top. Meanwhile, Dogecoin is far from the market top, as it usually only happens when 95% of the supply is in profit.
DOGE Forecast: Recovery Expected
Dogecoin price faced resistance at $0.16, which has been tested several times in the past. If it turns into support, the price will reach the level of $0.18, which covers the coin’s path to $0.20. Taking these barriers would trigger a 25% rally, which would help the price recoup recent losses.
However, if this resistance fails to break through, Dogecoin could fall to $0.15. The loss of this support could push the price back to $0.12, which would take away the strength of the bullish scenario. On the other hand, the three-day Relative Strength Index (RSI) has dropped below the 50 mean level for the first time since February 24, and the Awesome Oscillator is also poised to slide below the zero mean level. Both the momentum indicators suggest a fading of the bullish momentum on a high timeframe perspective.
