Dogecoin Price Analysis Plots Fresh Reversal as DOGE Hits Oversold Territory

Dogecoin Price Analysis:  The cryptocurrency market experienced a significant downturn this week as Bitcoin decisively broke below the $60,000 mark. The continued sell-off from the Mt. Gox exchange is exerting strong downward pressure on BTC prices, impacting the broader altcoin market as well. Amidst this decline, major altcoins, including Dogecoin, have lost the possibility of forming a local bottom and are extending their corrections further. Is it safe to hold?

Also Read: DOGE, PEPE, And MOG Holders In Profit Above 75% Despite Downturn

Dogecoin Price Analysis: 27% Drop and Major Liquidations Mark Tough Week

Amid the recent market sell-off, the Dog-themed memecoin experienced a three-day decline, with its price plummeting from $0.125 to $0.091, marking a 27% loss. In this period, the long-position holds faced a liquidation of $16.23 Million as per the data from Coinglass.

However, the falling price faced a sudden demand pressure at $0.0916 and revered the Dogecoin price to $0.099, while the market cap recovered to $14.4.

This uptick developed a long-tail candle precisely at the lower trendline of a bull-flag formation. This setup is known to lead to a temporary counter-trend move for buyers to regain strength for the next leap.

Also Read: BitMEX Expands Support For Dogecoin, Shiba Inu, Pepe Coin & Others; Here’s How

In addition, the Crypto analytics firm Santiment reports unprecedented levels of Fear, Uncertainty, and Doubt (FUD) on social media as Bitcoin dips to $55,000. Over the past 24 hours, the ratio of “sell” to “buy” mentions has reached a record high for 2024, peaking on July 4th at 13:00 UTC with the largest sell-to-buy call ratio of the year.

???? Markets have continued to bleed, and social media is now showing historic levels of FUD. It is rare for an hour to go by where there are more mentions of “sell” than there are “buy” across crypto forums. But we’ve seen a few of these instances in just the past 24 hours,… pic.twitter.com/DdXAYP6n81

— Santiment (@santimentfeed) July 5, 2024

This spike in negative sentiment presents a potential contrarian buying opportunity for bold traders, according to Santiment.

Under the influence of this pattern, the Dogecoin price declined from a high of $0.228, experiencing a 56% fall to its current price of $0.099. If the flag setup holds true, the DOGE price is expected to rise by 23%, challenging the overhead trendline. 

A breakout from this flag pattern would signal the end of the correction trend. This post-breakout rally could propel the asset to $0.174, with the potential to reach $0.228.

Technical Indicator

• EMAs: The DOGE price fall below the 200-day Exponential Moving Average suggests the sellers are the force behind the current market movement.
• RSI: The daily Relative Strength Index (25%) slope dived to the oversold region should attract dip buyers looking for discounted prices.

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