Dogecoin Price Analysis: Overhead Supply Puts $DOGE Price At Risk of Major Correction

Dogecoin Price Analysis: In the weekly time frame chart, the Dogecoin price shows the formation of a falling channel pattern. Over the past seven months, the popular memecoin has been in a steady downtrend as its prices keep resonating with falling trendlines. Despite a bullish reversal from the pattern key support trendline, the weakness in bullish momentum indicates a possible correction in the near future.

Also Read: Dogecoin Price Analysis: Bearish Pattern Raises Doubts For $0.1 Price Target

Dogecoin Price Daily Chart

• A breakdown below the wedge pattern’s support trendline could plunge the DOGE price by 22%
• The coin price below the weekly EMAs(20, 50, 100, and 200) reflect the overall trend bearish
• The 24-hour trading volume in the Dogecoin coin is $308.5 Million, indicating a 35% loss

Source-Tradingview 

After the early June sell-off,  the Dogecoin price rebounded from the combined support of $0.053 and a lower trendline of the channel pattern. However, even after six weeks, the buyers were unable to surpass the June 10th high of $0.0726, indicating a weakness in bullish momentum.

In addition, the higher price rejections in the weekly candles, projects the overhead supply is intense. By the press time, the DOGE price trades at the $0.08 mark and rallies a short-term recovery under the influence of a rising wedge pattern.

In case, the coin price breaches the wedge pattern’s support trendline, the sellers will overthrow buyers and lead a significant downfall. The potential drop could tumble the coin price 22% down to revisit the $0.053 support.

[converter id=”doge-dogecoin” url=”https://coingape.com/price/converter/doge-to-usd/?amount=1″]

Will DOGE Price Recovery Continue?

The daily time frame chart shows a rising wedge pattern currently carrying the current recovery in Dogecoin price. While this bearish continuation pattern supports the theory of potential downfall, a breakdown above the pattern’s resistance trendline could turn the table in buyers’ favor. This upside breakout with daily candle closing will intensify the momentum and bolster buyers for further recovery.

• Bollinger band: The midline of the Bollinger band offers significant resistance to rising DOGE prices.
• Relatives strength index: the weekly RSI slope above the 40% mark indicates the buyers’ attempt for a bullish recovery.