- Dogecoin’s price is facing a potential 20% drop as it struggles to break key resistance levels and technical indicators point to a strong bearish trend.
- Additionally, declining whale activity and market sentiment add to the risk of a significant downturn.
Dogecoin (DOGE) is facing a precarious situation as its price struggles to maintain bullish momentum. Despite being a popular meme coin, DOGE has failed to break through crucial resistance levels, signaling potential trouble ahead. Currently, the cryptocurrency is poised to test its lower trend line for support, with broader market trends adding to its woes.
Technical indicators are painting a grim picture for Dogecoin. The Average Directional Index (ADX), which measures trend strength, has surged well above the 25.0 threshold, reflecting a strong downtrend. This uptick in ADX suggests that the bearish momentum for DOGE is gaining strength, pointing to a possible continued decline in its price.
Whale Activity Shows Disinterest
Adding to the bearish outlook, on-chain metrics reveal a significant drop in crypto whale activity. Large investors, particularly those holding between $100,000 and $10 million worth of DOGE, have shown minimal accumulation over the past month. These whales, who control about 21% of the total DOGE supply, appear to be stepping back, which indicates a lack of confidence in a near-term recovery for the meme coin.
This decrease in whale interest further diminishes the likelihood of a bullish reversal. With key players reluctant to increase their positions, the chances of DOGE rebounding strongly are slim, putting additional pressure on its price.
Price Levels to Watch
For most of August, Dogecoin’s price hovered around $0.097, struggling to solidify the $0.101 level as a reliable support. This failure has raised concerns about the coin’s ability to maintain support at $0.093. If DOGE drops below this threshold, it may test the lower trend line, potentially falling to around $0.077. This would represent a 20% decline from current levels.
Historically, $0.077 has been a strong support level for Dogecoin. However, breaching this level could accelerate the downtrend further. On the other hand, if DOGE can hold above $0.093 and eventually turn $0.101 into a support level, there is potential for a rally. Yet, this scenario hinges on significant buying pressure to counter the prevailing bearish sentiment.
Dogecoin’s price is at a critical juncture, with technical and on-chain indicators suggesting a potential 20% drop if current trends continue. The meme coin’s ability to reverse this bearish trend will depend heavily on its ability to maintain key support levels and attract renewed buying interest.
