Dogecoin worth retains dropping after Elon Musk’s tweet, DOGE contemplating dropping 78% – based on Twitter
- Dogecoin price is currently on the verge of testing a critical level of support at $ 0.161.
- Elon Musk responds to a comment that his son is holding DOGE.
- Bull run gains in 2021 could be wiped out if the $ 0.161 support breaks.
The Dogecoin price has fallen massively since its peak in April. This steady decline is approaching a critical demand barrier, the collapse of which could lead to a cascading sell-off.
Elon Musk and his influence on cryptocurrencies
Elon Musk, CEO of Tesla, played a crucial role in assessing the market value of Dogecoin and other meme coins. While his tweets used to skyrocket dog-themed cryptocurrencies, his influence seems to be waning lately.
Musk responded to one of the comments by saying, “Lil X” (referring to this son) “keeps his doge like a champion. I literally never said the word “sell”! “
Although the mention of “Dogecoin” supported the DOGE price on July 17th, the dog-themed cryptocurrency continued its decline soon after, suggesting tremendous selling pressure and Musk’s lesser impact on cryptocurrencies.
This comment follows a February 10 tweet in which the Tesla CEO stated that he bought “Dogecoin for the small x”.
Bought Dogecoin for Lil X so he could be a toddler
– Elon Musk (@elonmusk) February 10, 2021
As Musk continues to lose his hold on the meme coins, the specs for DOGE are painting red flags and warning of an imminent sell-off.
Dogecoin price is approaching critical threshold
Dogecoin price has fallen 76% from its high in April to its current level of $ 0.178. Last week, DOGE has fallen 18% and around 40% since June 19, suggesting that investors are selling off their holdings.
While Musk’s July 17th tweet temporarily boosted the price, the sell-off resumed. If Dogecoin price continues to fall, it will approach the $ 0.161 support level that forms the cutout of a head and shoulders pattern.
This technical formation contains three prominent peaks, with the central swing point being higher than the other two known as the “head”. The swing highs on either side are called “shoulders”.
All of the spikes ricochet off a support level at $ 0.161 called the “clipping”.
The setup forecasts a 78% decline to $ 0.018, determined by adding the distance between the top of the head and the neck line to the breakout point at $ 0.161.
Hence, investors need to keep a close eye on a crucial daily candlestick close below this level as it confirms the beginning of a downtrend.
The demand zone, stretching from $ 0.045 to $ 0.088, could absorb and even contain selling pressure, but increased bearish momentum could easily break this barrier.
DOGE / USDT 1-day chart
On the flip side, the sell-off may be delayed if Dogecoin price manages to stay above the cutout at $ 0.161.
Though unlikely, DOGE will have to climb 81% and land a pivotal daily candle close above $ 0.294 to invalidate this bearish thesis.
In such an event, Dogecoin price could rise 142% to hit the June 2nd swing high at $ 0.447.