Dogecoin Tests Key Fibonacci Zone, Could See Reversal with Strong Volume

Dogecoin price action is testing a crucial Fibonacci support zone that aligns with VWAP, POC, and daily support.

The broader market structure remains bullish, with the current pullback seen as a potential higher low.

Volume dynamics will be critical in confirming any bullish reversal and maintaining upward momentum.

Dogecoin's recent price movement has pulled it into a highly significant technical region. The current price action is testing the Golden Pocket Fibonacci retracement zone, an area often seen as a major support level. This region coincides with the VWAP (Volume Weighted Average Price), the point of control (POC), and daily support, creating a confluence of technical factors that could indicate a potential reversal.

The overlap of the Golden Pocket with VWAP, POC, and daily support makes this zone crucial for Dogecoin. This is a critical area that has historically served as a turning point in price action. Traders are watching this region closely, as a strong defense of these levels could set the stage for a bounce toward higher price levels. Moreover, the Dogecoin ETF (TDOG) has recently been listed by 21Shares on the NSCC could lend additional support and bolster buyer confidence.

Market Structure Remains Bullish

From a structural standpoint, Dogecoin's current price correction appears to be a healthy retracement within an overall bullish trend. The broader pattern of higher highs and higher lows remains intact. The pullback into this key support zone could be viewed as a potential higher low, which would solidify the bullish framework for the asset. If buyers can defend this level, a rally back toward the swing high is possible in the near future.

Source: TradingView

For a reversal to materialize and a move toward the swing high to take shape, volume dynamics will be crucial. Bullish volume must align with price action to confirm any upward momentum. Without the necessary volume, efforts to push prices higher could fail, leading to extended consolidation within the current support zone. As such, traders will be watching volume indicators closely to assess the strength of any potential price movements.

Critical Test for Dogecoin’s Price Action

Dogecoin’s price is at a crossroads, testing the key Golden Pocket Fibonacci zone that aligns with multiple important technical levels. The combination of VWAP, the point of control, and daily support creates a solid base for a potential price reversal. However, the ultimate direction will depend on volume confirmation, which remains the deciding factor for whether the asset can maintain its bullish momentum or risk further consolidation.

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