Crypto

Dogecoin price likely to continue falling despite breakouts | Cryptocurrency

  • The price of Dogecoin is trading in a descending triangle with an additional technical ceiling at the top.
  • The price of DOGE, even with a few upside breakouts, still looks bearish.
  • Given the development of other asset classes this week, the outlook for next week appears to be a break to $0.050 to the downside.

The price of Dogecoin (DOGE) is trading in tight ranges as while some breakouts have taken place both up and down, the body of the candlestick between open and close gets smaller each week. The risk is in consolidating on a weekly basis, so failure may occur. This indicates that each upside breakout is a trader’s trap and causes those traders even more pain on the pullback.

DOGE price to provide more downward pain

Dogecoin price is playing a dangerous game with traders as several breakouts in recent weeks create the false illusion that upside potential is yet to come. The real situation is quite the opposite, as the weekly open and close show the smallest difference between each other, even if it is profit or loss for the week. This indicates consolidation and a strong breakout in the near future, where the close of the week will tell a lot.

Instead, the price of DOGE appears to be in danger of falling sharply lower back to $0.050, breaking through the bottom of the bearish triangle that has formed over the past few weeks. With all due respect to the 55-day SMA and the descending triangle trendline this week, a weekly close lower would be a good indicator of a possible breakout next week if it doesn’t happen over the weekend. So Sunday’s close will be key, depending on whether the close is inside the triangle or below the bottom.

DOGE/USD weekly chart

As mentioned above, one scenario remains: a weekly close above the red descending triangle trendline and the 55-day SMA. Sunday night’s close will see the move into Monday’s Asian session and could well lead to a continuation of next week’s rally to $0.0900. According to stock markets, if they are able to exit bear market territory, this could create a tailwind for cryptocurrencies in the coming weeks.

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