Dogecoin price at risk of 70% correction as Elon Musk grows concerned about DOGE whales

Dogecoin price seems to be breaking out of an ascending triangle in a downward direction after enduring a two-week-long consolidation phase. Further selling pressure could see DOGE's market value dive to $0.018

Dogecoin price on the verge of a steep correction  

In a recent tweet, the CEO of Tesla, Elon Musk, said that the levels of whales concentration on the network is the "only real issue" with this cryptocurrency. 

Data from IntoTheBlock shows that 16 addresses hold roughly 49% of 128.40 billion DOGE tokens in circulation. These whales have a disproportionate impact on prices because of their enormous holdings and their ability to coordinate buying and selling activity.

Musk stated that if DOGE whales were to sell most of their holdings, the meme token would get his "full support."

Following Musk's remarks, it seems like speculators rushed to exchanges to short Dogecoin. The spike in selling pressure pushed this altcoin towards the hypotenuse of an ascending triangle, where it has been contained over the past two weeks. 

By breaking through the $0.055 support level, the odds will increase for Dogecoin price to plummet by more than 70% towards $0.018.

DOGE 4-hour chart

IntoTheBlock's In/Out of the Money Around Price (IOMAP) model shows that the $0.055 support level poses a lot of significance to Dogecoin price. Here, approximately 1,800 addresses previously purchased 4.10 billion DOGE. 

A 4-hour candlestick close below $0.055 will send these investors "Out of the Money," and they might try to sell their holdings to avoid further losses.

Dogecoin IOMAP

It is worth noting that Dogecoin price must hold above $0.055 to invalidate the bearish outlook. If this were to happen, DOGE could reverse to retest the triangle's x-axis at $0.081. Moving past this barrier could catapult the meme token to a new all-time high at $0.143.