Dogecoin Faces Hurdles Amid Investor Skepticism, Descending Wedge Pattern

• Dogecoin faces volatility due to a shift in supply from long-term to short-term holders.

• Analysts suggest a bullish breakout if Dogecoin surpasses key resistance at a descending trendline.

Dogecoin (DOGE) is currently navigating potential volatility. Despite moving within a bullish pattern, the necessary positive cues from investors are absent, raising concerns about the meme coin’s price stability.

Dogecoin’s price stability is being challenged by a significant shift in its supply holding patterns. Recently, there has been a notable movement from mid- and long-term holders to short-term holders. Over the past month, the supply held by short-term holders has surged by 2 billion DOGE, from 10.5 billion to 13.4 billion, according to Santiment.

This shift in holding behavior suggests that Dogecoin may face further bearish conditions unless investor sentiment changes.

At the time of writing this,  DOGE is trading at approximately $0.127, showing a 3% increase over the past 24 hours. Trading volume has also increased by 34%, indicating reduced market activity. Over the past month, Dogecoin’s value has plummeted by 22%, highlighting a challenging phase for this popular memecoin.

Analyst LongtermX Outlines Potential Bullish Scenario

Crypto analyst LongtermX has provided insights into potential price movements of Dogecoin against Tether, focusing on key aspects of price behavior and suggesting trading strategies. According to LongtermX, Dogecoin is trading in a neutral zone, just above a crucial support level of $0.12097.

This classification is based on a cloud indicator used to gauge market sentiment. The prices above the yellow cloud are deemed bullish, within or just below the yellow cloud are neutral, and bearish below the red cloud.

LongtermX’s analysis highlights a descending trendline on the chart, a significant resistance point. The analyst asserts that a decisive break and close above this trendline must confirm a bullish breakout. If DOGE can achieve this, LongtermX predicts a significant upward movement aiming for the golden pocket at $0.18, representing the 0.618 Fibonacci retracement of the previous major move.

This potential move from the current price to $0.18 would mark a 50% increase, a feasible target according to LongtermX’s analysis.

LongtermX emphasizes that this trade should only be considered if the price action confirms a breakout above the trendline, ensuring the move is supported by market momentum. The analysis also comes with a cautionary note: If Dogecoin reaches the $0.18 target but fails to sustain this level, it likely signals a potential reversal, continuing the bearish trend. In this scenario, traders should be prepared for the price to drop significantly, potentially testing lower support levels below the red cloud.

Kaleo Predicts Short-term Dip, Long-term Boom

On the other hand,  Dogecoin enthusiast and analyst Kaleo foresees a dip to the $0.08-$0.10 range, attributing this potential decline to DOGE’s consistent downward trend since its notable rallies in 2021. Kaleo believes this pattern is characteristic of meme coins, which often experience cycles of rapid ascents followed by prolonged declines.

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$DOGE / #Dogecoin

For those of you who say DOGE is boring – for the most part, you’re right.

It’s spent ~9.5 years of its existence trending sideways or down. The other 1 year? It had one run that pumped ~6000% from the lows and another that pumped more than 30,000%.

The… pic.twitter.com/523tqCMBdC

— K A L E O (@CryptoKaleo) June 25, 2024

Despite the immediate bearish outlook, Kaleo does not discount the possibility of a future surge. He speculates that a “memecoin supercycle” could drive DOGE to $1 or even $2, although he refrains from predicting a specific timeline for such a dramatic rise. Kaleo’s analysis highlights the unpredictable nature of meme coins and the potential for significant fluctuations driven by market sentiment and speculative trading.