• Dogecoin price is approaching the 200-day simple moving average (SMA) for the first time since June 22.
  • DOGE head-and-shoulders neckline currently rests just below the 200-day SMA at $0.160.
  • Meme token nears another oversold reading on the daily Relative Strength Index (RSI).

Dogecoin price rests at a critical inflection point with the May 19 low and May’s descending trend line pressing down, while the 200-day SMA tries to restrain the relentless selling pressure since June 29. As long as the trend line is insurmountable, DOGE will break below the strategically important moving average and will trigger the neckline of the head-and-shoulders pattern.

Dogecoin price has lost the trust of investors as it drifts lower

May’s descending trend line has impeded Dogecoin price strength since June 29, highlighted by the failure of DOGE to log one daily close above the trend line. The result has been completing the right shoulder of a complex head-and-shoulders pattern that originated in April.

The measured move of the head-and-shoulders formation is 82%, establishing a Dogecoin price target of $0.028. To provide perspective, a collapse of that size would smash the support inherent in the 200-day SMA, the June 22 low of $0.152, the April 23 low of $0.135, the 50-week SMA at $0.105 and the January 29 high of $0.100.

A decline of 82% from the neckline at $0.160 seems extreme even within the context of a cryptocurrency market under pressure. A more reasonable target for Dogecoin price is a test of the January 29 high of $0.100, equaling a 37% move from the current position of the neckline and 46% from the current price.

There is one problem with the remarkably bearish forecast. The daily RSI is already near an oversold reading, and the last time it did mark an oversold condition was on June 22. Moreover, since the beginning of 2019, the indicator has only dropped below 30 one other time before June, in March 2020.

DOGE/USD daily chart

DOGE/USD daily chart

If Dogecoin price can close above $0.210 on a daily basis, it would be the first confirmation that the slow drift below May's descending trend line has come to an end and position DOGE to explore the resistance framed by the confluence of the 50-day SMA at $0.280 with the June 29 high of $0.281. A rally to the 50-day SMA from the $0.210 trigger would yield a 30% gain for investors.

As a result of the building downside momentum and support and resistance levels crossing, Dogecoin price has reached an inflection point. How it resolves will likely have long-term ramifications for the DOGE story. 

Here, FXStreet's analysts evaluate where DOGE could be heading next.

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC scales higher, taking altcoins with it

Bitcoin price exuded bullishness over the past week as it continued to rally without significant corrections. As a result, Ethereum, Ripple and other altcoins have followed suit. Although the entire market looks bullish at the time of writing, things could turn awry if BTC witnessed a September 7-style crash.

More Bitcoin News

Dogecoin killer Shiba Inu ready for new bull run

Shiba Inu gets listed on Binance.US, SHIB price recovers from the loss posted over the past week. The Shiba-Inu-themed token is one of the top 10 most mentioned cryptos on Twitter alongside BTC, ETH, DOGE, ADA. Shiba Inu CEO reveals that Shibarium, Shiba L2 using Bone as native token, is currently under development.

More Dogecoin News

AVAX price to hit new all-time high at $80 as Avalanche bulls take over

AVAX price rose exponentially after breaking out of a crucial resistance level on September 10. However, this uptrend was cut short as the markets collapsed on September 12, which led to a quick retracement. However, Avalanche seems to be back on track and ready to continue its rally.

More Cryptocurrencies News

XRP price awaits 26% upswing, but stiff hurdles may blindside Ripple bulls

XRP price appears to be headed for a 26% climb, but the hopes of a Ripple rally could be hampered by the multiple resistances that stand in the way of the bullish target. The cross-border remittance token could find substantial support, should the optimistic outlook be ruined. 

More Ripple news

BEST CRYPTO BROKERS/EXCHANGES



Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast

BTC

ETH

XRP