Dogecoin (DOGE) has been consolidating within a horizontal channel since August 8. The asset has encountered resistance at $0.11 and found support at $0.09 during this period.
Price Increase and Negative Divergence
Despite a recent 4% price increase over seven days, daily trading volume fell by 37%. This indicates a negative divergence between price and volume.
The negative divergence suggests weakening buying momentum. In a healthy uptrend, price increases are typically accompanied by volume increases. However, the drop in volume during the price rise suggests the rally is being driven by a limited number of investors.
Whale Activity Declines
Data from IntoTheBlock shows a 100% drop in the net flow of whales. This indicates this group has refrained from trading over the past week. The absence of whale activity could be a risk factor for DOGE’s future price movement.
Horizontal Price Movement
Despite the negative divergence and decrease in whale activity, DOGE continues to rise. The DOGE/TRY pair is currently at 3.62 TL. The Parabolic Stop and Reverse (SAR) indicator has remained below the price level since August 10, suggesting a horizontal price movement over the past few weeks.
Potential Breakout or Breakdown
If DOGE breaks above the upper line of the horizontal channel, the price could exceed $0.11. Conversely, a downward price movement could see a drop back to the $0.09 support and potentially retreat to $0.08.
In conclusion, Dogecoin has been consolidating within a horizontal channel since August 8. The negative divergence between price and volume, along with the decline in whale activity, could be warning signs for DOGE’s future price movement. However, the asset continues to rise, and a breakout or breakdown from the horizontal channel could determine its next direction.
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