Dogecoin in danger: the price may collapse by 20%
The outlook for Dogecoin (DOGE) is now colored in pessimistic tones as the coin fails to maintain bullish momentum
Over the past few weeks, the popular Dogecoin memcoin has been unsuccessfully trying to break through key resistance levels. It is now close to testing the trend line, which serves as support. In addition, the overall cryptocurrency market is in a bearish trend, so DOGE's ability to sustain growth is questionable.
Dogecoin needs a boost
Dogecoin is increasingly leaning towards a bearish scenario, with technical indicators predicting a continuation of the downtrend. For example, the Average Directional Index (ADX), which measures the strength of the trend, is now holding well above the 25.0 threshold. This indicates a strong trend and promises further price declines.
The rising ADX confirms the strengthening of the bearish trend. Despite occasional short-term rallies, DOGE is failing to capitalize on bullish opportunities and the price is under sustained pressure from the general market sentiment.
Apart from technical indicators, onchain metrics also paint a worrying picture for Dogecoin. Cryptocurrency whale activity has declined noticeably, especially among addresses with balances between $100,000 and $10 million DOGE. These large holders hold 21% of the total DOGE supply. However, the latest data shows an almost complete lack of accumulation over the past month.
This lack of accumulation by whales suggests that large investors are either cautious or not interested in increasing their positions. This is a sign of weak faith in a speedy recovery. With this attitude of key players, the likelihood of a significant bullish reversal becomes less likely, which further pressures the price.
DOGE forecast: new day, new challenge
For most of August, the price of memcoin fluctuated around $0.097 and failed to turn the $0.101 level into reliable support. This failure has raised concerns that DOGE could also lose support at $0.093 as well. If this does happen, the coin could be in trouble in September.
If Dogecoin fails to hold above $0.093, it is likely to test the lower boundary of the current downtrend. It is expected to be around $0.077 (-20% from current levels). Historically, the $0.077 level has served as a strong support, and its breakout may accelerate the downtrend.
However, not all is lost. If Dogecoin defends the $0.093 level, it will have a chance to turn $0.101 into a support level. This would give the coin an upside opportunity and potentially negate the current bearish outlook. However, this scenario would require significant buying pressure to materialize.
