Bitrabo Editorial
A prominent cryptocurrency analyst, Crypto Daily Trade Signals, has issued a caution to the Dogecoin community regarding a possible downside risk for the meme-inspired crypto asset due to a bearish technical pattern amid recent negative sentiment in the digital asset market.
The Pattern: Bearish Descending Triangle Formation
Analysis by Crypto Daily Trade Signals points out a Descending Triangle Pattern formation in Dogecoin’s current market structure. This pattern consists of lower highs against a flat support level currently at $0.121, indicating a bearish signal.
Despite the strong support at $0.121, the current bearish market environment influenced by Bitcoin might override this support. The expert mentioned that though the support level has been tested multiple times, investors are hopeful it will hold this time.
The analyst stated:
DOGE price was previously moving within a descending triangle. While the base offers firm support, the prevailing bearish conditions influenced by Bitcoin could undermine it. Investors are counting on the support to withstand the pressure this time.
Additionally, Crypto Daily Trade Signals highlighted another bearish signal as DOGE trades below the 50-day and 200-day Simple Moving Averages.
Descending triangles are typically bearish, yet an upward resolution often leads to a significant rally. If there is a bounce at this level, the analyst suggests DOGE could break out to $0.237. However, the path upward might face resistance at $0.182 and $0.206.
If Dogecoin fails to rebound and breaches the triangle base, the analyst predicts a drop to $0.096 and potentially $0.072 in the near future.
Investor Pessimism Grows
With Dogecoin struggling to regain momentum, this technical analysis is crucial for the meme coin amid a broader market downturn, causing investors to doubt the short-term prospects of cryptocurrencies.
As DOGE navigates this pattern, the upcoming days will be decisive in determining whether it can withstand bearish pressures or succumb to further declines.
At present, DOGE trades at $0.125, showing a 2.79% increase in the past day. While its market cap has risen, trading volume has decreased. The recent positive momentum in the meme coin market suggests potential gains for DOGE in the near future.