Dogecoin Price Analysis: DOGE’s Downtrend Seems Unstoppable toward $0.2

Last Updated July 23rd 2021
2 Min Read
  • Dogecoin extends the descending triangle breakdown with losses aiming for $0.2.
    • All short-term technical indicators point toward a continuing bearish trend.

    Support at $0.5 may invalidate the downtrend, allowing bulls to come in for gains above $0.3.

    Dogecoin opened Pandora’s box after closing the day under $0.3 last Friday. The losses spilled into the weekend session affecting the entire cryptocurrency market. Tentative support at $0.28 failed to halt the gravitational pull on DOGE, extending the bearish leg to $0.25.

    Meanwhile, Dogecoin trades at $0.26 at the time of writing amid the vivid bearish outlook. If support at $0.25 is shattered, investors can expect another dip heading to $0.2.

    Dogecoin recovery hampered as losses linger

    The Moving Average Convergence Divergence (MACD) indicator has a bearish signal that is still vivid, notwithstanding the retreat from $0.3. For instance, the MACD line (blue) recently crossed under the signal line, as shown on the four-hour chart. In addition, the divergence between the two parameters has been sustained, suggesting the downtrend may continue in the short term.

    DOGE/USD four-hour chart

    DOGE/USD 4-hour chart 062121

    As reported on Friday, a descending triangle formation on the four-hour chart predicted a drop to $0.24. Dogecoin dived to $0.25 during the weekend session, almost hitting the target. Realize that descending triangles are highly bearish and often lead to trend continuations. Therefore, if support at $0.25 fails to hold, the losses may carry on toward $0.2.

    The In/Out of the Money Around Price (IOMAP) on-chain model by IntoTheBlock reveals immense resistance heading to $0.3. If bulls are not ready for a ferocious battle, recovery will not be fast as investors may hope.

    The largest seller congestion zone runs from $0.298 to $0.306. Here, 63,400 addresses previously bought 2.7 billion DOGE.

    Dogecoin IOMAP model

    DOGE/USD volume chart 062121

    Support levels are scarce, as conferred by the model, adding credence to the bearish outlook. The area running from $0.226 and $0.234 is the most substantial buyer congestion zone. Here, around 1,900 addresses are reported to have purchased roughly 238 million DOGE.

    Looking at the other side of the picture

    Closing the day above $0.25 would be a bullish signal and perhaps renew the stability in Dogecoin’s market. Despite the resistance highlighted by the IOMAP model, bulls can gradually build the uptrend toward $0.3.