Dogecoin price plunged 1.3% to $0.096 during the U.S. trading session on Thursday. The downtick follows the broader market sentiment as Bitcoin extends correction below $60000. With most major cryptocurrencies struggling to find a bottom, September may see an extended downtrend. Despite the bearish outlook, large holders (whales) remain optimistic, continuing to accumulate DOGE even as its price declines, signaling long-term confidence.
Dogecoin Price Eyes Major Reversal Amid Wedge Pattern Formation
On the daily chart, Dogecoin price is undergoing a consistent correction influenced by a falling wedge pattern. The price has resonated between two converging trendlines, dropping from $0.22 to $0.08, marking a substantial decline of 64%. This pattern typically suggests the potential for a future breakout, but for now, Dogecoin remains in a corrective phase as it continues to move within the wedge formation.
Currently, the DOGE price maintains a lateral trend within the bearish pattern, with the bottom support at $0.091.
As the critical support level avoids any closing price below it, the underlying demand is clearly visible. The support trend line has provided four bounce-back opportunities within the falling wedge pattern. Meanwhile, the resistance trend line only has three reversals.
Nevertheless, the increased bearish influence has resulted in a death cross event and a bearish crossover of 100 and 200 EMA. Hence, all the crucial EMAs in the daily chart maintain a bearish alignment. Moreover, the 20-day EMA and 50-day EMA act as dynamic resistances to keep the bullish growth under check.
Currently, Dogecoin price is trading at $0.09825 with an intraday growth of 0.26%. Further, the lower price rejection in the previous candle projects a high possibility of a bullish cycle to challenge the overhead trend line.
A potential breakout from wedge resistance will signal a major trend reversal, offering buyers suitable support to maintain a bullish outlook. The Dogecoin price prediction signals the post-breakout rally could target $0.15, registering a potential 40% rally.
The MACD indicator in the daily chart maintains a converged trend with the ongoing bearish alignment. However, the lack of intense histograms on either side projects an indecisive trend in the momentum indicator.
DOGE Accumulation Surges as MVRV Decline Signals Potential Reversal
The Market-Value-to-Realized-Value (MVRV) indicator gauges the valuation of an asset by comparing its market capitalization to its realized capitalization. This metric helps identify overvalued or undervalued conditions in the market.
A 3.38% decline in the MVRV Ratio over the last 30 days suggests that short-term traders are witnessing loss. Any further downtick could trigger these speculative traders’ forced liquidation and cause initial price volatility. However, such events often attract long-term buyers in the market and drive a sustained reversal.
Moreover, the Santiment data shows a consistent surge in the supply distribution metric to $18.66 billion, with a range of 10 million to 1 billion DOGE token holders, suggesting growing market interest and increasing accumulation of DOGE tokens. This On-chain metric analyzes major stakeholders’ distribution and concentration of supply. It provides insights into market liquidity and potential price impacts from large holders.
This rise indicates that more significant amounts of DOGE are being held by a broader range of investors, which could impact market liquidity and price dynamics.
From a different perspective, the consolidation between the $0.091 and $0.1150 projects a potential head and shoulder pattern. With the neckline at the base support, the potential breakdown will trigger a massive correction in the Dogecoin price.
On the bottom side, the support levels are at $0.080 below the $0.091 neckline, followed by the $0.072. However, for a detailed analysis, check our top memecoin article.
The post Dogecoin Price Flashes Buy Signal as On-chain Data Points to 40% Rally appeared first on CoinGape.
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