Dogecoin price to retrace to $0.12 again

Dogecoin price has produced the largest candle this year in favor of the bears. DOGE enthusiasts should consider a bearish macro scenario.

Dogecoin price looks dangerous

Dogecoin price has displayed serious bearish signals as the token failed Tuesday's $0.17 breakout. The large bearish engulfing candle produced a 20% decline on the daily chart, which signals supreme control of the trend. The bears have likely trapped breakout traders at the $0.17 zone and anyone who did not quickly take profit from last week's successful trade setup.

Dogecoin price currently trades at $0.146. The volume indicator from yesterday's sell-off shows profound bearish control, and the bulls have yet to display any comparable retaliation. When observing the structure of what led up to the massive sell-off, it appears that the bears have always been present. The popular meme coin is coiling in a descending triangle-like manner.

DOGE/USDT 1-Day Chart

Analysts at FXStreet have maintained that Dogecoin price will eventually retest a historical trendline at $0.09 and possibly $0.08. The coiling wedge now sheds light on how the bears will manage to pull off such a cataclysmic move. In the short term, analysts will be looking for a wave D of the triangle to land in the $0.12 zone. 

Invalidation for short-term traders will be a closing candle above wave C at $0.18. It is worth noting that C waves are commonly known to be complex structures. Thus a break above $0.18 will not void the overall triangle formation. Investors should be aware that Dogecoin price has been deemed high risk and unfavorable until wave A at $0.2150 is breached. If this scenario occurs, analysts will develop a trade setup to partake in the next meme token rally, which could land the Dogecoin price back to $0.25.