- Dogecoin price up 5% on the week but shows resistance above current levels.
- The bears could induce a 20% decline for DOGE if market conditions persist.
- Invalidation of the bearish thesis would arise from a hurdle above $0.092.
Dogecoin price has been struggling to break through a key resistance level, leaving both bulls about DOGE's future price movements. This piece identifies a possible bearish scenario for the notorious meme coin.
Dogecoin price shows bearish signals
Dogecoin's price is up 5% on the week, but there are barriers it needs to overcome to justify a bullish bias. Bulls have found resistance near the $0.10 barrier for almost six weeks, with prices failing to produce a candlestick close above the psychological level on the weekly timeframe.
Dogecoin price is currently auctioning at $0.087. The 21-day simple moving averages (SMA) and 8-day exponential moving averages (EMA) are hovering above the current trading price, which suggests that short-term traders may have a bearish bias.
The uptrend witnessed earlier in the winter, which rose Dogecoin from $0.06 to $0.12 within a week, never broke out on the Relative Strength Index (RSI). The RSI typically confirms true uptrends after they breach overbought conditions near 70. In Dogecoin's case, the RSI only rose towards the 65 area, a key level that bears enter when anticipating a downtrend.
Considering these factors, the bears have the upper hand, and they could be setting up for a move toward January's low at $0.069, which would lead to a 20% decline from Dogecoin's current market value.
DOGE/USDT 1-Day Chart
Invalidation of the bearish thesis would arise from a breach above the previous week's opening price of $0.092. A breach of this barrier could induce an upswing to challenge the RSI's suppressed pivot point. The bullish scenario would lead to a spike toward $0.1175, resulting in a 38% increase in market value.
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