Dogecoin (DOGE) has had a strong start to the new year, with gains of 37% rising from $0.06756 to $0.09266. However, this rally came to an end as the momentum of Bitcoin (BTC) slowed and dropped, causing DOGE to fall to the $0.08000 zone. Currently, DOGE is facing a critical selling pressure level after BTC reclaimed the $22,000 zone. This selling pressure could undermine a strong upward momentum for DOGE, but the coin may push through if the forthcoming Fed announcement has a positive impact on the market.
The On Balance Volume (OBV) indicates that buying pressure and DOGE prices have risen since the beginning of the year. The Relative Strength Index (RSI) is currently at 61, after retreating from the overbought zone and making a U-turn, indicating strong bullish momentum. This suggests that bulls may attempt to go beyond the selling pressure zone and retest the overhead resistance at $0.09266. However, a favorable Fed announcement could also bolster BTC, pushing DOGE to aim for its December high of $0.10689, offering a potential gain of 20%.
But it’s important to keep in mind that if bears push DOGE below the demand zone around $0.08000, the bullish bias will be invalidated. In this case, a downswing could find a steady hold at $0.07500. Additionally, according to Santiment, DOGE’s recent rally saw long-term holders enjoy brief gains around 12 January, but losses were incurred before another round of recovery. It’s also worth noting that DOGE recorded a spike in Age Consumed coins, indicating that idle DOGEs were exchanged between addresses, which could suggest long-term holders offloading their assets to cash out from recent gains. Therefore, investors should be cautious of the selling pressure zone and keep an eye on the Fed announcement and market developments.