Dogecoin (DOGE) Anticipates a 20% Correction after Top Signal
Briefly –
- Dogecoin price prepares for a plunge after the alt revealed a bearish chart formation.
- However, the meme coin might see massive support following the correction.
- A technical indicator suggests that DOGE might have registered a local top
Dogecoin might experience a 19% plunge following the emerging bearish pattern. Meanwhile, a technical indicator showed that DOGE reached its local top. Keep in mind that the canine-themed asset faces a massive resistance that prevents it from achieving higher targets.
DOGE Sets a Local Top
According to the daily chart, Dogecoin showed a climbing wedge formation. That confirmed bearish mood awaiting the leading meme crypto.
Although Dogecoin has risen by almost 80% from the 20 July swing lows, the current condition prints trend reversals.
According to the dominant technical pattern, Dogecoin might see its value plunging by 19%. With that, the asset might drop towards the targeted $0.221 lows, matching with the 50 –day SMA.
The MRI (Momentum Reversal Indicator) indicated a top signal. That way, DOGE’s outlook supports the bearish narrative. Also, the RSI shows that the meme asset is somewhat overbought.
However, Dogecoin might acquire support before the anticipated bearish mood. The coin had its first defense line around the lower border of the uphill wedge, matching the 27.2% Fib retracement at $0.259.
The following support area lies at a 38.2% Fib retracement level around $0.244. The next one would be at the 50% Fib retracement, connecting the 20-d SMA near $0.228.
Increased Dogecoin losses to spur investor’s interest might see the crypto testing the 61.8% Fib retracement at $0.212 before more downward moves towards the 200-d SMA.
On the other side, a change of narrative for Dogecoin to break and close over the 100-day Simple Moving Average around $0.296 might see upside price ticks. However, IOMAP reveals that the coin has multiple resistances ahead.
For now, DOGE has its obstacles at $0.308, where 51,700 crypto addresses hold 2.88 billion Dogecoins.
Keep in mind that IOMAP shows that DOGE has many challenges awaiting if it tries to register higher highs in August.
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