- Dogecoin price filled a market vacuum at $0.0621 before attempting to collect the liquidity below the equal lows at $0.0585.
- A sweep of $0.0585 will be akey requisite to catalyzing a 10% rebalancing move to between $0.0645 and $0.0649.
- A flip of the $0.0558 level into a resistance barrier will invalidate the bullish outlook for DOGE.
Dogecoin price underwent a tight consolidation between September 28 and 30, which eventually resulted in an explosive move up that collected the buy-stop liquidity resting above the September 27 swing high. This move quickly ran out of steam, however, and was followed by a reversal that knocked DOGE down to retest the aforementioned equal lows.
Dogecoin price delays its upswing
Dogecoin price action is a clear example of liquidity runs and imbalances. The 21% upswing between September 22 and 24 collected the buy-stop liquidity resting above the swing highs at $0.0650. This run-up also created a swing high at $0.0682, which signaled a reversal that allowed DOGE to shed roughly 11%.
As discussed in the previous article, the Dogecoin price has rebalanced the Fair Value Gap (FVG), extending from $0.0607 to $0.0618. This move came before sweeping the $0.0585 level for liquidity.
Regardless, Dogecoin price rallied only 5% and undid these gains quickly and is currently lingering just above $0.0585. A sweep of this level seems plausible in the near future, which could then be followed up by a swift move higher.
In such a case, investors can expect DOGE to rebalance another imbalance, stretching from $0.0645 to $0.0649. From the current position, a move to a retest of the lower limit of this FVG would amount to a 10% gain and is likely where holders should book profits.
DOGE/USDT 4-hour chart
On the other hand, if the Dogecoin price produces a lower low below the September 19 swing low at $0.0558, it would indicate a lack of buying pressure. This development would cause a shift in market structure favoring bears and invalidate the bullish thesis for DOGE.
This development could knock Dogecoin price to $0.0530.
