Dogecoin (DOGE) has been in a steady downtrend since early April. The price of the major meme coin has formed a falling wedge pattern, which is often associated with a bullish breakout.
However, things may not be as optimistic as they seem. Recent market activity suggests that Dogecoin may face significant resistance, which could push the price lower.
Dogecoin is trending downwards
The market sentiment for Dogecoin is currently very bearish. The MVRV long-short gap is an important indicator for assessing investor behavior, as it often signals that short-term holders are in an advantageous position and that selling pressure is increasing.
As short-term holders anticipate further declines, many are likely to sell their positions. As a result, the price of Dogecoin is under downward pressure, reinforcing the bearish sentiment surrounding the meme coin.
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Also, the market depth shows significant buying activity at a 10% premium from the current price. Historically, around 31.42 million Dogecoins were purchased at this price range. However, around 75 million Dogecoins are currently being sold.
This makes the $0.116 level a key resistance level . As strong selling continues at this price level, market depth suggests that this will continue to act as a significant barrier.
Dogecoin Price Prediction: Uptrend Not Yet Probable
Dogecoin is currently trading at $0.105 in a descending triangle pattern. The $0.108 level needs to be a strong support level for a bullish reversal. If successful, the next target is $0.118, which is a major resistance level that could open the door for further upside.
However, due to the strong selling pressure at the $0.116 level, a downtrend is more likely. If Dogecoin falls below the current support level of $0.094, a severe drop to $0.077 is possible, which represents a 25% drop. If you look at the chart below, you can see the major support and resistance levels of DOGE.
Read more: Dogecoin (DOGE) Price Prediction 2024/2025/2030
On the other hand , if Dogecoin succeeds in turning $0.108 into a support level , it could create a breakout. In this case, DOGE could erase the bearish sentiment and rise to $0.172 in the long term. However, to do so, it must first break the $0.118 level, which would be a significant challenge for Dogecoin.
