Despite a recent 16% price decline, Dogecoin (DOGE), the world’s largest crypto meme coin, is facing continued downward momentum. This is due to the formation of a bearish price action pattern on the daily time frame, coupled with an overall bearish market sentiment.
Technical analysis conducted by CoinPedia indicates that DOGE is currently exhibiting a bearish trend, characterized by a head and shoulders price action pattern on the daily chart. The price of the meme coin is approaching a critical breakdown point, which could lead to a significant drop in value.
If Dogecoin breaches the neckline of the bearish pattern and closes a daily candle below the $0.16 mark, it may experience a 21% decline, potentially reaching a support level of $0.13 in the near future. The coin is currently trading below the 200 Exponential Moving Average (EMA) on both the daily and four-hour charts, signaling a strong bearish trend and downward momentum.
Despite this bearish outlook, investors seem to be accumulating DOGE tokens, suggesting a buy-the-dip strategy. On-chain analytics firm Coinglass reported a $6.11 million outflow of DOGE from exchanges in the past 24 hours, indicating potential accumulation and increased buying pressure.
While this significant outflow could potentially trigger an upside rally, the prevailing bearish market sentiment may hinder sustained upward momentum. At the time of writing, DOGE is trading near $0.168, with a 1% price drop in the last 24 hours and a 60% decrease in trading volume, reflecting reduced participation from traders and investors amidst the bearish market conditions.
In conclusion, Dogecoin’s technical analysis and recent market trends point towards a continuation of its downward trajectory. Traders and investors should closely monitor key support levels and market dynamics to make informed decisions regarding their DOGE holdings.