Dogecoin price forms a descending triangle pattern, hinting at 31% correction towards $0.1516. The bearish MACD and the position of the 100, 50 and 200 SMAs above the DOGE price show that recovery faces significant resistance upwards.
Dogecoin price continues with its downtrend following the November 10 and 16 drops that saw the have seen price tank 31.7% from highs of about $0.341 to the current price around $0.2324. There have been several recovery attempts but no significant progress has been made to push DOGE towards the October 28 high.
Dogecoin Price May Drop 32% to $0.1516
At the time of writing, DOGE is hovering around $0.2324 and appears to have formed a descending triangle chart pattern on the 12-hour chart. Bulls are currently dealing with overhead pressure from the $0.2356 resistance level. Holding above the support line provided by the horizontal axis of the triangle at $0.2215 has become very crucial for the resumption of the upward movement. However, the overall technical picture shows that DOGE may drop further in the near term.
The chart pattern will be validated if Dogecoin price breaks below the X-axis provided by the horizontal trendline of the governing chart pattern. The breakout should occur before the trend lines converge and has a target equal to the distance between the triangle’s thickest points.
This means that a breakout below the triangle could see Dogecoin lose as much as 32% to tag the $0.1516 level as shown on the 12-hour chart below.
However, if this happens, it will provide investors with an opportunity to buy DOGE at lower prices before the bull run resumption.
DOGE/USD 12-Hour Chart
The bearish outlook is accentuated by the position of the Relative Strength Index (RSI) indicator at 38.13 close to the oversold region suggesting that DOGE’s market sentiment is bearish at the moment.
Moreover, the position of the Moving Average Convergence Divergence (MACD) indicator below the signal line validate Dogecoin’s bearish narrative. Also note that the MACD is positioned below the zero line in the negative region signaling a negative market sentiment for DOGE.
Looking Over The Fence
Dogecoin price bearish outlook will be invalidated if support by the horizontal axis of the triangle at $0.2215 holds and DOGE flips the resistance at $0.241 into support.
If this happens, DOGE bulls will kick-start the uptrend that is likely to see the Dogecoin price slice through the triangle’s descending trendline at $0.2541 embraced by the 100 SMA confirming a bullish breakout.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.