- Dogecoin price analysis highlights DOGE’s reaction to Elon Musk’s recent tweet.
- Dogecoin price action moving closer to retesting a critical support barrier at $0.161.
- If Dogecoin tests the $0.161 critical support line, all bullish gains made in 2021 will be invalidated.
Since registering a new all-time high in April, Dogecoin‘s price action has been on a steady downward trend. From the look of things, this consistent price decline appears to be fast approaching a critical demand barrier, which, if breached, could lead to massive selling pressure.
Dogecoin Price Analysis: General price overview
Elon Musk, Tesla and Space X CEO, may not have the power to determine markets, but his actions continue to produce significant nudges. While his controversial tweets used to work in favor of meme-themed crypto assets, this trend appears to be changing. Recently, the tech billionaire commented on his Twitter handle that his son Lil X was holding DOGE like a champion. Although he never mentioned the word buy, Dogecoin experienced a brief buying pressure on July 17 before embarking on a massive downward price trend. The current reaction hints at Elon’s diminishing influence over dog-themed crypto assets. While Elon continues to lose his influence over the dog-themed crypto assets, technical indicators suggest Dogecoin is up for a 70 percent price decline.
This is likely to be escorted by heightened selling pressure.
Since hitting its new ATH in April, Dogecoin price analysis shows DOGE has been on a steady decline, dropping by almost 75 percent to where it currently stands, $0.176. Over the past few days, Dogecoin has lost more than 15 percent of its value and roughly 40 percent since June 20. This is a clear indication that investors and Dogecoin holders are offloading their assets. While Elon’s tweet on July 17 was seen to curtail further losses, Dogecoin’s plunge temporarily halted before resuming the descent. If Dogecoin continues with the ongoing negative price trend, it is likely to test the $0.161 support line, which creates the neckline of a head-and-shoulders pattern.
Dogecoin price movement in the past 24 hours: DOGE still capped under $2
According to Dogecoin’s 24-hour price chart, the crypto asset has been on a constant downward trend, showing signals of approaching the $0.161 support line. Coincidentally, this support line forms the neckline of Dogecoin’s head-and-shoulders pattern. This technical pattern has 3 distinct peaks, a central swing point, and 2 shoulders. In Dogecoin’s situation, all the highs bounce from the $0.161 support line, also known as the neckline. The current arrangement projects a 75 percent price decline towards the $0.018 line. This is determined by tallying the distance between the shoulder’s peak and the neckline to the $0.161 support line.
Therefore, market participants need to be on the lookout for a robust daily candlestick close below the mentioned support level. If this happens, the price action will confirm the commencement of a downward price trend. This is likely to see Dogecoin settle around the closest demand area that ranges from $0.044 to around $0.089.
Dogecoin 4-hour chart: Should we be on the lookout for further losses?
On looking at critical technical indicators in the 4-hour price chart, it is clear Dogecoin is in for further price declines. For instance, the Moving Average Convergence Divergence (MACD) technical indicator is currently hovering above the signal line but showing signs of plunging. As for the Relative Strength Index (RSI), the technical indicator seems to show the possibility of a price consolidation for the meme-themed crypto asset.
Dogecoin Price Analysis: Conclusion
Further price declines can be avoided if Dogecoin manages to settle above the $0.161 support line. Although it is doubtful, Dogecoin needs to register an 80 percent price rally to produce a strong daily candlestick close above the $0.290 price to invalidate all the recent bearish narratives. In such an event, DOGE might appreciate by 140 percent to hit to retest the June 2 swing high of $0.448.
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