Dogecoin price spooked, leaves DOGE on the outside looking in

Dogecoin price is still up 5,830% YoY, despite the 80% correction from the May high. The volatility has not transferred to this rally attempt as DOGE has traded in an ascending parallel channel with the 200-day SMA transmitting support. It is a disappointing evolution after the digital asset registered a bullish momentum divergence on the daily chart, beat the resistance of May’s descending trend line and triggered a double bottom pattern. Until Dogecoin price can elevate above the declining 50-day SMA, it is recommended to restrain urges to accumulate a position.

Dogecoin price asking where the whales are hiding

A different environment surrounds Dogecoin price, as the recent social media hype of Elon Musk has failed to engineer a powerful and sustainable rally in DOGE. Earlier in the year, the posts of Elon Musk and other high-profile celebrities could catapult the cryptocurrency notably higher and put DOGE as the lead story on the daily news roll.

Without the momentum of FOMO, created by social media antics, Dogecoin price has reverted to a sleepy altcoin, almost afraid, unable to participate in the impulsive rally being lead by Bitcoin and Ethereum. Unlike the other cryptocurrencies, the DOGE rebound from July 21 has taken on a corrective price structure, not characteristic of a solid bottom supported by whale market operators, leaving DOGE on the outside looking in.

The indecision or fear that has defined Dogecoin price action over the last 15 days has compressed the Bollinger Bands to the lowest range since the period before the April surge. It does not portend a major rally is inevitable, but it does reveal that a substantial move could be around the corner. 

After falling from the ascending parallel channel, Dogecoin price may be hinting that the significant move is beginning. A daily close below the union of the May 19 low with the 200-day SMA at $0.195 would be the first point of confirmation of a bearish resolution from the sideways price action and position DOGE for a quick drop to the June 22 low of $0.152, and then the April 23 low of $0.135 before the May descending trend line may temporarily rescue it from further losses.

Depending on the momentum of the decline and the conditions in the cryptocurrency complex, Dogecoin price may target the January 29 high of $0.100 before securing a reliable bid, representing a 49% decline from the 200-day SMA.

DOGE/USD daily chart

However, if Dogecoin price captures the 50-day SMA at $0.221 on a daily closing basis, it would nominate a better outcome for DOGE, including a test of the June 25 high at $0.291. An advance to $0.291 would carry a 32% gain and persuade DOGE investors that the token established a final correction low in July.

With the tailwind of a strong cryptocurrency market, the spooked Dogecoin price has failed to plot a bullish outlook. Thus, once the market leaders encounter robust resistance and begin retracing, DOGE will be vulnerable to track the bearish outlook outlined above. Practicing anything but patience right now could incur unnecessary portfolio losses.