- Dogecoin has molded a double-top pattern on the four-hour chart, printing a bearish outlook.
- DOGE may break down massively if the critical support at $0.056 gives in to overhead pressure.
- The transaction history model reveals that Dogecoin has a relatively smooth recovery path.
Dogecoin has joined in the bullish party that came with the Easter celebrations over the weekend. The upswing was the largest DOGE has made since Elon Musk’s endorsement at the beginning of April.
Following the dumping to $0.056 (primary support), the Meme Coin hit highs above $0.066. However, a correction is underway due to the formation of a highly bearish technical pattern.
Dogecoin Bows to a Double-top Pattern
Dogecoin has formed a double-top pattern on the four-hour chart. The extremely bearish technical pattern occurred after the price hits relatively the same top twice separated by a trough without successfully making a real break.
The resistance represents a zone with an immense concentration of sellers. Note that trading above this crucial level is usually a difficult task. An increase in volume confirms the double-top pattern. Moreover, massive losses come into play when the price slices through the neckline region.
DOGE/USD four-hour chart
In the meantime, the bearish outlook has been strengthened by the Moving Average Convergence Divergence (MACD) indicator on the four-hour chart. The MACD has started to retreat toward the midline. Besides, massive losses may follow if the MACD line (blue) strikes beneath the signal line.
Dogecoin is falling fast from an on-chain perspective into the bears’ hands. For instance, the number of new addresses joining the network has been dropping since the beginning of April. At the time of writing, addresses joining the protocol daily stand at nearly 39,000 from a 30 day high of approximately 68,000. This is a significant drop and if it continues, Dogecoin will struggle with sustaining the uptrend.
Dogecoin new addresses chart by IntoTheBlock
Dogecoin’s Bullish Outlook
IntoTheBlock’s IOMAP model reveals that Dogecoin faces slight resistance to the upside compared to the robust support levels. In other words, it would be easier for bulls to bolster DOGE above $0.07 as opposed to bears sliding to $0.055.
Dogecoin IOMAP model
The model above shows that Dogecoin sits on top of enormous support, running from $0.057 to $0.058. Here, roughly 157,000 addresses previously purchased 12.31 billion DOGE. Holding above this support could trigger buy orders as Dogecoin lifts above $0.07.