- Dogecoin price heads toward a huge downfall if support at $0.2 caves.
- The IOMAP on-chain model adds credence to the pessimistic outlook, highlighting a robust barrier in the recovery path.
Dogecoin price recovered from last week’s dip under $0.2. Support established at $0.195 renews the bull’s strength. Investors saw the light at the end of the tunnel as DOGE reclaimed a position above $0.2.
However, the uptrend could not make it above $0.23, a barrier that had been accentuated by the 50 Simple Moving Average (SMA). A correction followed immediately, whereby Dogecoin closed the gap to the critical level at $0.2.
Dogecoin price suffers as bears surmount the bulls
As overhead pressure intensifies, Dogecoin risks another downhill trip under $0.2. Many sell orders will be triggered if DOGE makes another daily close beneath this level. Most investors are taking a hands-off approach after sinking into losses following the majestic rise to $0.75.
Elon Musk, the founder of Tesla, believes that Dogecoin needs an upgrade to become the most used cryptocurrency globally, overtaking Bitcoin and Ethereum. However, analysts believe that the days when Musk influenced Dogecoin rallies are long gone, and no matter what he says now, DOGE will not make a drastic swing higher.
Consequently, the Moving Average Convergence Divergence has a developing bearish signal, according to the four-hour chart. Initially, Dogecoin flipped bullish as the MACD recovered from -0.0094. However, the uptrend stalled under $0.23 as the trend momentum indicator failed to rise above the mean line.
At the time of writing, a bearish signal will come into play if the 12-day exponential moving average (EMA) closes the day beneath the 26-day EMA. This bearish outlook will call more sellers into the market amid an exhausting tug of war. If support at $0.94 and $0.19 fails to hold, an increase in overhead pressure will pull Dogecoin toward the recent anchor at $0.16.
DOGE/USD four-hour chart
The In/Out of the Money Around Price (IOMAP) model by IntoTheBlock reveals an immense resistance likely to hamper Dogecoin price bullish bid above $0.2. Attempts to close the gap to $0.3 will face seller congestion between $0.211 and $0.217. Here, around $68,000 addresses previously bought 6.97 billion DOGE. Failure to crack this wall will add pressure to the tentative support at $0.2 and $0.19.
Dogecoin IOMAP on-chain model
On the downside, Dogecoin has been accorded a relatively strong anchor zone running from $0.187 to $0.193. Here, 9,700 addresses are still profiting from the 5.4 billion DOGE bought in the range. If this support holds, the uptrend toward $0.3 will be renewed. However, if the bearish pressure overpowers the bulls, losses to $0.16 will become apparent.