Notably, the ensuing price action on the daily candlestick timeframe chart after the rejection has led to the creation of a bearish engulfing pattern. Price action in this region formed a series of bearish candles, which is a technical formation that shows sellers are regaining control after the bullish push. Furthermore, this is the second rejection from this level, following a similar failed breakout attempt in March. The double rejection reinforces the strength of the supply zone and a lack of buyer follow-through above $0.24.
Aside from the bearish engulfing pattern, the rejection is also followed by a clear increase in trading volume, which adds to the bearish outlook. It also supports the notion that Dogecoin may be entering a corrective phase in the short term.
Now that a resistance level has been identified around $0.25, the Dogecoin path has a few paths to follow. The overall outlook is starting to tilt bearish, at least in the short term. With this in mind, the analyst highlighted two key support levels to keep an eye on.
At the time of writing, Dogecoin is trading at $0.2171, down by 3.7% in the past 24 hours.
Featured image from Unsplash, chart from TradingView
