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Dogecoin fell 8% today to $0.149 in 24 hours while the cryptocurrency market fell 5%.
The meme token rose 2% in a week after falling 25% in two weeks and 20% in a month.
It risks completing a head-and-shoulders pattern during the previous two months, which would mean a decline to $0.12.
DOGE and the market are oversold, thus it may bottom out before completing such a chart pattern.
DOGE's chart suggests the token has bottomed and will shortly return.
Its relative strength indicator (purple) dipped below 30 yesterday and is moving toward 40, where it might rise further.
DOGE's 30-day moving average (orange) has fallen below its 200-day (blue) and may soon rise.
The coin's trading volume is still low, at $1.4 billion today (compared to $9 billion in early March), so it may suffer additional short-term drops before recovering.
Interesting, its resistance (red) and support (green) levels are softly converging, which usually signals a significant move in either direction.
Several observers note that the token is creating a head-and-shoulders (or ‘Bart Simpson’) pattern, suggesting further decline.
Since whales have shifted DOGE to trading platforms in recent days, the currency may be close to completing the above pattern.
The currency has already reached an oversold position, therefore purchasers may be about to acquire it at a discount.
While the market reacts to the news that the Department of Justice wants to imprison Binance founder Changpeng Zhao for three years and the SEC wants more than $4 billion from Terra Labs and Do Kwon, it should pick up in the coming weeks once things stabilize.
Dogecoin might reach $0.2 by summer and $0.5 by year's end.
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