Dogecoin dodges bullish breakout hopes, now eyes 40% dip—here’s why

Key Takeaways

• Dogecoin price are in a bearish downtrend for the past two weeks.
• Moreover, the memecoin’s chart forecast a 40% fall in prices.

NEW DELHI (CoinChapter.com) —  Dogecoin has been in a lackluster bear run since May 8, ironically the day it reached its ATH of $0.760. Now, the Doge price charts suggest a further decline in its prices, with the token poised for a 40% dive from its current price levels.

Doge Price Charts

Dogecoin prices have failed to breach above May’s descending (Red) trendline, which remains an imposing resistance for the token. As a result, Doge prices have declined to May 19’s low of $0.195. The meme coin dropped by 3.97% on Monday and 3.67% on Tuesday, closing the day at $0.199. Additionally, the token’s prices are moving in a descending parallel channel.

The Descending Channel consists of two trendlines parallel to each other, connecting lower highs and lower lows. Thus, the Channel is considered bearish. Furthermore, if the token’s breakout is downwards, it indicates a sell signal and often results in a further pulldown of prices. Prices may break above the upper trendline too, which marks the beginning of a bull run.

Related: Lackluster volume, business rivalry keeps Chainlink from popping 100%.

Doge prices have stayed below the 50-Day (Violet) Moving Average and 20-Day (Green) Exponential Moving Average trend line. Thus, the token is in a bearish phase in the short term. Also, Doge prices have crashed to reached the 200-Day (Yellow) MA trendline. Interestingly, the 200-Day MA acted as support for the token’s short-lived bullish rally that began June 22.

Once Doge breaches the support at $0.17, it is likely to continue a downside move to the next support level at $0.135. However, if the token fails to rebound from the support level, bears will likely push the price down to $0.114.

Moreover, should Doge suffer a widespread sell-off, chances of breaking below the lower trendline of the parallel channel come into play. If that happens, the token will seek out the early February support levels of $0.0298. However, a move that low will essentially erase the gains made by the cryptocurrency in 2021.

What the Oscillators Say

The MACD line ( 12-Day and 26-Day EMA difference) has moved below the momentum oscillator’s signal line (9-Day EMA of MACD), indicating a bearish outlook for the meme coin. Moreover, the MACD histogram (difference between MACD line and MACD signal line) moved below zero on July 13. Thus, the MACD indicates that bears have a firm grip on Doge prices.

Related: Litecoin looks at a 20% LTC crash according to this setup.

The relative strength index, or RSI, for Doge is in the neutral range with a value of 34.70. However, it is moving downwards and will soon enter the oversold/undervalued levels. Dogecoin’s trading volume has also declined significantly.

The continued downward trend of Dogecoin proves that FOMO was the primary fundamental behind its growth. Though the coin serves no real purpose, it gained immense popularity due to social media. For example, Tesla CEO Elon Musk’s tweets often fuel the token’s price jumps, highlighting social media’s influence on the coin’s rally.

Doge was trading at $0.1955 at the time of writing down 2.19% on the day.