Dogecoin struggles as more bearish signals emerge

Dogecoin price is on the back foot along with global markets and sees its attempts to pop higher, cut short.
DOGE price action is looking to the downside under several bearish elements.
Expect more weakness to come once peace talks fail and violence flares up again in Ukraine.

Filip Lagaart FXStreet

Dogecoin (DOGE) has proven it is susceptible to the events on the world stage following the news on Sunday that Russia would be cut off from SWIFT. This put DOGE price action on the backfoot. In the downturn, $16.98 is set to be breached, and a daily close below would spell more pain to come for DOGE bulls. A dip towards $10.35 would not be impossible if the situation deteriorates again and Putin is set to use nuclear weapons.

Dogecoin could implode 40% to $10 if the situation in Ukraine deteriorates

Dogecoin investors are not enjoying their entry from past Thursday or Friday when risk-on looked to be back leading to expectations Dogecoin might break its downtrend. That all looked to be lost on Sunday after news came in that the EU was in agreement to cut off Russia from financial markets. With that move, Dogecoin dropped 6% in total.

The situation is still premature and far from over and DOGE price action could remain under pressure as the 55-day Simple Moving Average is still in a death cross with the 200-day SMA, the Relative Strength Index still has room to go before being oversold, and – since Sunday – a red descending trendline has been formed that will exert further downside pressure. There are plenty of bearish signals that will be hard to overcome and could see DOGE first hit $14 before tanking further towards $10.35. By then, the RSI will be in oversold territory, limiting any further downside moves for the time being.

Polkadot/USD daily chart

White smoke could still come at any time if some official can broker a deal between both parties, which would ripple into global markets as a giant sigh of relief. In such a scenario, DOGE price action would pop above the red ascending trend line and look for a test towards $20.00, or near historical resistance at $20.50. Around that level, the 55-day SMA will also come in, forming a double cap on price action. Should bulls be able to pierce through that level and even obtain a daily close above, get set for plenty of more upside potential.