Disclaimer:Â The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
Elon Musk’s favorite cryptocurrency has been trending slightly higher over the past week. However, recent gains of 5% were nowhere close to the gains seen by some of its top-10 counterparts that saw double-digit percentage growth. A look at its chart suggested that DOGE’s price needs an external catalyst to push the market higher in order avoid an incoming decline.
At the time of writing, Dogecoin was valued at $0.207 and held the 8th spot on CoinMarketCap’s rankings.
Dogecoin Daily ChartÂ
Source: DOGE/USD, TradingView
DOGE’s daily chart highlighted two symmetrical triangle breakdowns that resulted in losses of 16% and 25%. Its reversal from 20 June’s low of $0.63 was critical to its market structure which would have turned increasingly bearish in case of another breakdown.
The reversal led to an up-channel as buyers made some inroads towards recovery. However, its technicals were yet to surpass key levels as DOGE approached the $0.215-resistance at press time.
ReasoningÂ
The daily Relative Strength Index has climbed above 50-55 for most altcoins that rallied behind Bitcoin. Alas, the same was not the case for Dogecoin just yet. Its RSI was below 50 – A sign that bulls had not assumed market control. The MACD also remained below the half-line and noted only a slight increase in bullish momentum.
The ADX has been dipping over the past few days. This suggested that DOGE’s uptrend has been easing. Considering these factors, DOGE faces an uphill battle to climb above $0.215 over the coming days. Such an outcome would see the price retrace towards the bottom trendline and the $0.194-support. A close below this area would open the floodgates for an even sharper retracement.
Conclusion
DOGE’s uptrend seemed to be weakening as the price approached the $0.215 price ceiling. Failing to hike above this zone over the next 24 hours could have a negative effect on the market. This would likely push DOGE back towards its 20-SMA.
Traders must also be on the lookout for a close below $0.194. In such a case, a massive decline could be in the offing.
