Dogecoin Price Prediction: DOGE Bulls Running Out of Options, Could the Week End in Bloodshed?

Last Updated July 23rd 2021
2 Min Read
  • Dogecoin price consolidation prevails as recovery becomes a hard nut to crack.
    • Bulls hope to hold onto support at $0.24, but the short-term technical picture is mainly bearish.

    Dogecoin price has been trending sideways for almost a week now. The sluggish price action has affected virtually all the crypto assets apart from a few like Aave, Compound, and Maker, which are currently retreating from their weekly highs.

    At the time of writing, Dogecoin trades at $0.24 amid rising overhead pressure from the stubborn resistance at the 50 Simple Moving Average (SMA). Keep in mind that losing this immediate support may trigger massive sell orders.

    DOGE/USD four-hour chart

     DOGE/USD 4-hour chart 070221

    Dogecoin price could drop before another recovery attempt

    According to the Bolliger bands applied to the four-hour chart, Dogecoin price consolidation may pave the way for a massive downswing. This technical index measures the volatility of an asset while at the same time identifying oversold and overbought conditions.

    On a lighter note, the Bollinger Bands reveal to the trader whether the market is quiet (consolidating) or loud (volatile). In a consolidating market, the bands tend to squeeze, but they expand when the market is volatile.

    It is essential to note that the bands function as dynamic support and resistance levels. When the bands squeeze, the indicator signals a potential breakout. The area between the upper and lower is relatively a no-trade zone.

    Moreover, the Bollinger bands does not identify where Dogecoin is headed following the breakout. A four-hour squeeze above or below the bands will validate the direction of Dogecoin price breakout.

    DOGE/USD four-hour chart

    DOGE/USD 4-hour chart 2 070221

    Subsequently, the Relative Strength Index (RSI) has a bearish inclination, especially after the midline support. In other words, sellers seem to be getting more aggressive and pushing a downward breakout. If support at $0.24 shatters, we are likely to see losses soaring toward $0.16.

    On the other hand, holding this support may allow bulls to control the price completely. Realize that closing the day above the Bollinger bands’ middle support will also add credence to the bullish outlook. At the same time, breaking the next hurdle at $0.26 will bring Dogecoin closer to $0.3.