Dogecoin’s range formation could offer traders this opportunity

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion

ALT HD – Here’s a likely opportunity from DOGE’s range formation 

• DOGE formed a sideways structure on the four-hour chart. 
• Sellers were firmly in control at the time of writing as per the rising CVD spot. 

After an extended drop last Saturday (10 June), Dogecoin [DOGE] entered a sideway structure on the four-hour chart. From last weekend until press time, DOGE has oscillated within the key pocket of 23.6% ($0.05779) and 50% ($0.06316) Fib levels. 

How much are 1,10,100 DOGEs worth today? 

With a weak Bitcoin [BTC] below $25k, DOGE could offer a shorting opportunity if the sideway’s structure persists. 

Will the range formation extend?

Source: DOGE/USDT on TradingView

The Fibonacci retracement tool (yellow) was placed between a lower high on 5 June and a swing low on 10 June. Based on the tool, DOGE has been consolidating between the 23.6% ($0.05779) and 50% ($0.06316) Fib levels.

At the time of writing, the price action edged closer to the range high and the 50% Fib level of $0.06316. Besides, the overall H4’s market structure was bearish. So, a likely price rejection could set DOGE to retest the range low/23.6% Fib level of $0.05779. 

If that’s the case, such a move could offer a shorting opportunity with an entry at the 50% Fib level ($0.06316), targeting the 23.6% Fib level ($0.05779). 

A candlestick close above 61.8% Fib level ($0.06556) will invalidate the bearish thesis. However, only a close above the lower high at $0.7333 could flip the H4 structure to a bullish bias. 

In the meantime, the Relative Strength Index (RSI) and the Chaikin Money Flow (CMF) both inclined. But only CMF crossed its median zero level, denoting improved capital inflows. On the other hand, the RSI fluctuated below the 50-mark, thus denoting overwhelming selling pressure. 

DOGE’s CVD declined; OI improved

Source: Coinalyze

The declining Cumulative Volume Delta (CVD) confirmed the overwhelming selling pressure seen from the RSI indicator. It showed selling volumes increased in the past few days. 

Read Dogecoin’s [DOGE] Price Prediction 2023-24

But the open interest (OI), which tracks open contracts on the futures market, improved slightly from $186 million on 14 June to above $200 million at the time of writing. Although the uptick in OI could offer slight hope to bulls, the strong decline in CVD means sellers were firmly in control.