Key Takeaways:
- Dogecoin price has formed a bearish pattern with a downside target of 53%.
- Lack of fundamentals have also hurt DOGE's price action.
NEW DELHI (CoinChapter.com) — The meme token Dogecoin (DOGE) price is coming down from the high of Elon Musk acquiring Twitter, as DOGE price forms a bearish pattern called the bear pennant.
Pennants are continuation patterns. They form when a period of consolidation with converging trendlines follows a large movement in cryptocurrency prices. Then, the asset breaks out in the same direction as the large initial movement.
Volumes play an important role in verifying the pattern. Per the rules of technical analysis, consolidation should occur with lower volumes, while higher volumes should accompany breakouts.
However, to confirm the pattern, DOGE volumes need to move up. Otherwise, the memecoin would continue to consolidate below $0.09. For a bear pennant pattern, traders calculate the price target by applying the initial flagpole’s height to the point where the price breaks out from the pennant.
Hence, dogecoin price might fall to $0.0405, nearly 53% from current price levels.
No Dogecoin News Likely Bad News For DOGE
Adding to the bearish winds against Dogecoin is the lack of new fundamentals. DOGE price rocketed after news of Elon Musk buying Twitter hit the wire. Moreover, speculation of Musk incorporating DOGE payment options for Twitter blue ticks added fuel to the token’s rally.
Also Read: Fan tokens surge ahead of the FIFA World Cup – more gains to come?
However, the excitement is now dying, and with the controversy surrounding many of Musk’s Twitter-related decisions, the DOGE price rally is stagnating. The Tesla CEO plans to find new leadership for the social media giant, expecting to reduce his time at Twitter.
Despite Dogecoin’s price action becoming stagnant, Musk continues to remain bullish on the token, proclaiming “DOGE to the moon” in a recent Twitter spaces. However, DOGE lacks fundamentals, with no new partnerships.
A DOGE-fueled payment option on Twitter might help the memecoin out.
DOGE Price Crabbing
DOGE price has been crabbing between its 200-day EMA (green wave) and 50-day EMA (purple wave) since Nov 11. The meme token dropped 53% between Nov 2’s high of $0.15 and Nov 9’s low of $0.071, before recovering slightly.
Long wicks at both ends of daily candles indicates active presence of bulls and bears at both ends of the price spectrum. However, if DOGE needles below the 50-day EMA support, the token’s price might fall to test support near $0.08.
A continued sell-off would likely result in Dogecoin price falling below its 100-day EMA to reach $0.075, a fall of 11.5% from current levels, before recovering.
Conversely, if Dogecoin price starts climbing, the memecoin would likely needle above the 200-day EMA resistance which would help DOGE target resistance from its 20-day EMA (red wave) near $0.09.
Moreover, a break and hold above immediate resistance might help DOGE price reach resistance near $0.1 before downside corrections pare gains.
Meanwhile, the relative strength index for DOGE remains neutral, with a value of 46.93 on the daily charts.
While DOGE is lacking fundamentals, MATIC is adding feather after feather to its partnerships cap. Read here to know more.
