• Dogecoin [DOGE] rallied 37% from $0.06756 to $0.09266 in the new year, but the rally ended when Bitcoin [BTC] momentum slowed.
• The On Balance Volume (OBV) and Relative Strength Index (RSI) are both showing strong bullish momentum, which could push DOGE beyond the selling pressure zone and towards its December high of $0.10689.
• Long-term holders of DOGE cashed out recent gains around 12 January, but a favorable Fed announcement could bolster BTC and fuel further gains for the memecoin.
Dogecoin [DOGE] has been one of the biggest beneficiaries of the recent crypto market rally, with the memecoin surging 37% from $0.06756 to $0.09266 in the new year. The rally came as Bitcoin [BTC] pushed past the $20K mark, prompting altcoins to follow suit. However, the rally ended after the flagship crypto’s momentum slowed and dropped, dragging altcoins down with it.
At press time, DOGE had recovered from its slump and was trading at a critical selling pressure level. The sellers had managed to push DOGE back to the $0.08000 zone, but bulls could push through if the forthcoming Federal Reserve announcement triggers the market positively.
A look at the technical indicators revealed that the On Balance Volume (OBV) had risen since the beginning of the year, boosting buying pressure and DOGE prices. This was further confirmed by the Relative Strength Index (RSI), which was 61 at press time after retreating from the overbought zone and making a U-turn, showing strong bullish momentum. Therefore, bulls could attempt to go beyond the selling pressure zone and retest the overhead resistance at $0.09266.
However, a favorable Fed announcement could bolster BTC, pushing DOGE to aim at its December high of $0.10689, offering a 20% potential gain. The above bullish bias will be invalidated if bears push DOGE below the demand zone (green) around $0.08000. Such a downswing could find a steady hold at $0.07500.
Santiment data also revealed that long-term holders of DOGE cashed out recent gains around 12 January. The data showed that the memecoin’s rally saw them enjoy brief gains, with their net position dropping from +50% to +15%. However, if Bitcoin [BTC] rallies following the Fed announcement, it could fuel further gains for the memecoin and benefit long-term holders.