Dogecoin [DOGE] Faces Critical Resistance: Why It Struggles to Break Past Key Level

• Dogecoin’s market structure has turned bullish once again.
• The lack of trading volume might dampen the bullish sentiment.
• Open Interest for DOGE has surged from $800 million to $931 million as the cryptocurrency gains close to 8.5% in value.

Dogecoin (DOGE) experiences a bullish surge with an 8.5% increase in value, but low trading volume raises concerns.

Dogecoin’s Bullish Market Structure

Dogecoin [DOGE] has been on an upward trend over the past month, breaking through the $0.165 resistance and forming a series of higher lows. Despite this positive price action, recent reports indicate that the Weighted Sentiment behind the meme token remains negative. This suggests that while the price is climbing, the broader public sentiment has not fully aligned with the bullish outlook.

Impact of Low Trading Volume

Technical analysis reveals that the weak social sentiment has had other effects on DOGE’s market performance. The lack of hype is evident in the volume indicators. Although there was a slight uptick in volume following a strong price performance on May 20th, it pales in comparison to the rallies seen in late February and late March. The On-Balance Volume (OBV) has formed higher lows in May, but due to the reduced trading volume, it has not surpassed the significant lower highs from April. The Relative Strength Index (RSI) on the daily chart reads 58, indicating strong momentum. The price is approaching the 50% Fibonacci retracement level at $0.175, suggesting a potential climb above this level.

Minimal Liquidations and Rising Open Interest

In the past 24 hours, DOGE’s Open Interest has soared from $800 million to $931 million, reflecting strong bullish sentiment among speculators who anticipate further gains. Liquidations have been minimal, even amid recent volatility, indicating that market participants are not keen on shorting DOGE. The spot Cumulative Volume Delta (CVD) has also been climbing slowly over the past two days. If these metrics maintain their current trends, Dogecoin is likely to reclaim the $0.175 level as support.

Conclusion

In summary, Dogecoin’s market structure appears bullish with significant gains in Open Interest and price. However, the low trading volume and weak social sentiment could pose challenges to sustained upward momentum. Investors should keep an eye on volume indicators and sentiment metrics to gauge the potential for future price movements. As always, it’s essential to conduct thorough research and consider multiple factors before making any investment decisions.