The Long-Term Bearish Pattern Could Result in a 50% Decrease in DOGE Price
If you’ve been keeping an eye on the DOGE price, you may have noticed that it is currently trading within a long-term bearish pattern. This pattern suggests that a breakdown from it could potentially trigger a significant 50% price decrease.
Both the weekly and daily timeframes indicate bearish readings, further supporting the possibility of a breakdown in the near future.
Dogecoin Price Trades Above Critical Support
An analysis of the weekly timeframe reveals that the DOGE price has been trading slightly above the $0.059 horizontal support area since June 2022. This support area has been validated multiple times, increasing its significance. The most recent validations have resulted in long lower wicks, which are considered signs of buying pressure.
Despite this seemingly bullish price action, DOGE has also been following a descending resistance line since November 2022. This, combined with the $0.059 horizontal support area, has formed a descending triangle, which is typically seen as a bearish pattern. Additionally, the DOGE price has been creating lower highs, indicating weakening momentum.
A breakdown that extends the entire height of the pattern would bring the DOGE price down to $0.030. To confirm the breakdown, DOGE needs to close below the $0.059 horizontal support area.
The weekly Relative Strength Index (RSI) further supports the possibility of a breakdown. The RSI is a momentum indicator that helps traders determine whether a market is overbought or oversold. Currently, the RSI is below 50 and falling, both of which are signs of a bearish trend.
DOGE Price Prediction: Has the Decrease Already Begun?
The daily timeframe also points towards a bearish DOGE price prediction. This prediction is based on both the price action and RSI readings.
On August 15, the DOGE price broke down from an ascending support line and accelerated its rate of decrease. This indicates that the previous upward trend has come to an end, and a new downward movement has begun.
Although the meme coin experienced a bounce on August 17, validating the $0.059 horizontal support area, it failed to move above the 0.382-0.5 Fibonacci retracement resistance area. According to the theory of Fibonacci retracement levels, this rejection suggests that the increase was merely corrective, and the overall trend remains bearish.
Similarly, the daily RSI is bearish as it was rejected by the 50 line and is now below it.
Considering these factors, the most likely DOGE price prediction is that the price will break down below $0.059 and experience a 50% decrease, reaching the next support level at $0.030.
However, it’s important to note that if there is a breakout from the long-term resistance line, this bearish scenario would be invalidated. In that case, DOGE could potentially increase by 90% to reach the $0.12 resistance area.
Hot Take:
It’s crucial for DOGE investors to closely monitor the ongoing bearish pattern and the key support and resistance levels mentioned. Keep a watchful eye on any potential breakout or breakdown, as it could significantly impact the future price of DOGE.
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