Dogecoin price rejected by stiff resistance, could trigger 40% sell-off

Dogecoin (DOGE) price is continuing its downtrend which has strengthened after bears seized the opportunity to add even more short positions, following the rejection at the $0.19 ceiling. Currently, tailwinds look to be fading for cryptocurrencies and bulls are unlikely to find much external support to try and defend the $0.16 floor. A break below there could spiral into a price correction to under $0.1, holding a 40% possible devaluation for DOGE.

Dogecoin price sees bears targeting $0.09 to the downside

Dogecoin price took another leg lower in its downtrend this week, below $0.19. The DOGE price started to normalize after a turbulent weekend, with bulls trying to reclaim $0.19 but they got rejected as bears seized the momentum, squeezing them out of their positions. As price action in DOGE now looks to test $0.16, bulls are scrambling to defend both the historical level and the monthly S1 support level, but without any tailwinds behind them to help.

DOGE looks ripe for the break to the downside below $0.16, as not many elements seem to be standing in the way. Bears will likely have a smooth run to the downside with only the monthly S2 support around $0.10 and the historical support level at $0.09 standing in the way.  The Relative Strength Index (RSI) will by then likely be trading highly in the oversold zone, indicating the correction will probably  halt at these levels as buyers renter the market seeing an opportunity to pick up DOGE at a discount.

DOGE/USD daily chart

If bulls can defend and hold $0.16, a return to $0.19 is likely – but again with the risk of another rejection. If market sentiment turns more positive for crypto this could act as a catalyst to push DOGE price above $0.19 and see a return to possibly $0.26, depending on the strength and number of factors. The issue is that both the 55-day and the 200-day Simple Moving Averages are hovering just above the monthly pivot around $0.24, making it quite a challenge to reach $0.26 in one rally.