DOGE and SHIBA Need to Stay Above These Key Supports to Reverse Their Downtrend

DOGE has gone up by 3% in the past 24 hours and currently stands at $0.1626 while Shiba Inu (SHIB) has gained 3.3% during this same period and sits at $0.00001193 per token.

Meanwhile, the combined market cap of meme has increased by 6.2% to $46 billion in the past day with Pepe (PEPE) leading the scoreboard with 9.3% gains while other more exotic tokens with market values below $1 billion like SPX6900 are posting double-digit gains during this same period.

However, trading volumes have gone down by 22.6% as volatility seems to be subsiding a bit. However, market sentiment continues to sour.

The meme coin sector is one of the most battered of the crypto market. Since its post-election peak of $137 billion, roughly two-thirds of the aggregated market value of this entire segment has evaporated.

This explains the poor performance of the Solana (SOL) token lately as meme coins are an important part of its ecosystem and make up a significant percentage of the network’s transaction volumes.

DOGE Needs to Stay Above $0.16 to Keep Rising

Moving to the charts, this bounce is justified as Dogecoin (DOGE) hit a key support at $0.1425 that prevented the token from collapsing to pre-election levels. Market participants may now interpret that the sell-off has gone too far as all of its Trump-liked have completely flown off the window.

This could be the beginning of a slow recovery for DOGE as long as that support level holds. However, momentum indicators in the daily chart are still favoring a bearish outlook as the significant drop that DOGE experienced in the past few days is weighing on moving averages.

Meanwhile, the hourly chart shows that DOGE has been on an uptrend since it bounced from that daily support but has not yet retested its most recent lower high. This means that bulls could still be inclined to push the price to those levels to retest that resistance.

The $0.1600 level remains the most relevant support to watch as a break below would signal a short-term trend reversal.

For now, the price is trapped in a channel that is 10% wide, meaning that this is still a volatile environment and traders should be extremely cautious and set their stop prices with a wide enough margin to leave room for these significant fluctuations.

Momentum indicators are favoring a bearish outlook but the uptrend is still in play so, the logical move would be to trade with the trend.

In that scenario, a long position once the price tags the $0.60 level would offer the highest risk-reward ratio if a stop-loss is set right below that level and the exit price is set at the $0.18 resistance.

SHIB Shows Similar Bullish Structure as Long as Key Support Holds

The situation is similar for SHIB as the price of this meme coin bounced off the $0.00001085 level on Monday as the market started its recovery.

The uptrend remains intact unless the $0.00001175 support is broken at some point. The American session initially sold off SHIB but buyers have shown up to scoop up the asset at its current levels.

As long as SHIB can stay above this threshold, the outlook is positive as the uptrend could lead to a retest of the $0.000013 resistance in the near term. Even at its current price, a long position offers a high risk-reward ratio of 2.2 if a stop price is set below the $0.00001175 support.