- Dogecoin price is approaching the 200-day Simple Moving Average (SMA) for the first time since June 22nd.
- DOGE’s head-and-shoulders neckline is currently just below the 200-day SMA at $ 0.160.
- The meme token is approaching another oversold value in the daily Relative Strength Index (RSI).
Dogecoin price rests at a critical turning point, with the May 19th low and May declining trendline pushing down, while the 200-day SMA seeks to contain relentless selling pressures since June 29th. As long as the trendline is insurmountable, DOGE will break below the strategically important moving average and trigger the clipping of the head and shoulders pattern.
Dogecoin price has lost investor confidence as it drifts down
The descending trendline in May has hampered Dogecoin price strength since June 29th, highlighted by DOGE’s failure to post a daily close above the trendline. The result is the completion of the right shoulder of a complex head and shoulder pattern that was created in April.
The measured head-and-shoulders movement is 82%, which sets a Dogecoin price target of $ 0.028. For perspective, a collapse of this size would reduce the support inherent in the 200-day SMA, the 22nd-low low.
An 82% drop from the $ 0.160 cutout seems extreme even in the context of a pressurized cryptocurrency market. A more reasonable target for Dogecoin price is to test the January 29th high of $ 0.100, which is a 37% movement from the current position of the clipping and 46% from the current price.
There’s a problem with the remarkably declining forecast. The daily RSI is already near an oversold level and last marked an oversold condition on June 22nd. In addition, since the beginning of 2019, the indicator has only fallen below 30 before June, in March 2020.
DOGE / USD daily chart
If Dogecoin price can close above $ 0.210 daily it would be the first confirmation that the slow drift below May’s descending trendline has come to an end and positions DOGE to explore the resistance created by the confluence of the 50- Day SMA at $ 0.280, with a high of $ 0.281 on June 29. A rally to the 50-day SMA from the trigger of $ 0.210 would give investors a 30% gain.
As a result of the build-up of the downside momentum and the exceeding of support and resistance levels, the Dogecoin price has reached a turning point. How it dissolves is likely to have long-term implications for the DOGE story.
Here, the analysts at FXStreet evaluate where DOGE could go next.