Dogecoin Steadies at $0.070 as Derivatives Signal Waning Selling Pressure
Dogecoin holds near $0.070 after a weekly 3.5% decline, but emerging bullish divergences and improved derivatives data suggest selling momentum may be losing steam.
Derivatives Market Signals Growing Optimism
Dogecoin maintains its position near $0.070, holding steady after a 3.5% weekly decline that had tested market conviction. While the near-term technical picture remains decidedly bearish with prices trading firmly below all major moving average thresholds, an emerging divergence between price action and momentum indicators suggests that selling enthusiasm may be dampening—potentially setting the stage for a technical rebound.
The derivatives segment is showing noticeable signs of capitulation reversal. The long-to-short ratio reached 1.25 on Tuesday according to CoinGlass data, marking its strongest level in more than a month. This reading reflects a meaningful shift in trader positioning, with long exposure now substantially outpacing short exposure. Complementing this, the funding rate—which measures the cost of maintaining leveraged positions—turned positive on July 24 and remains elevated at 0.0074%. A positive funding environment typically indicates that traders taking bullish positions are paying a premium for their exposure, reflecting genuine demand to buy at current levels.
Momentum Indicators Flash Divergence Signals
Despite the bearish price structure, technical momentum indicators are flashing contrarian signals. On August 1, Dogecoin printed a new lower low, yet the daily Relative Strength Index simultaneously registered a higher low—a bullish divergence that occurs when price deteriorates but momentum fails to follow suit. This pattern suggests that selling pressure, while still present, is losing its force. The Awesome Oscillator reinforces this interpretation, with its recent lows actually climbing even as Dogecoin hovers near its own lows. This divergence between price weakness and momentum strength is often a precursor to directional reversals.
Support and Resistance Framework
The $0.070 level provides immediate support, with the yearly low of $0.067 serving as the next critical floor before the psychological $0.065 threshold comes into play. Resistance appears layered across multiple levels: the 50-day exponential moving average at $0.075, a descending trendline near $0.080, the 100-day EMA at $0.083, and horizontal resistance at $0.088. A more decisive recovery would require overcoming the 200-day EMA at $0.100 and the major barrier at $0.102 to conclusively break the prevailing bearish setup.
The divergence between Dogecoin’s bearish price structure and strengthening momentum indicators could signal an important technical inflection point for altcoins—including XRP—as oversold conditions may set up mean-reversion bounces across the broader market.
Source: the source. Not financial advice.