Analysts warn of an incoming drop below 7 cents for Dogecoin, but after that, they say it could rise to $1.
Dogecoin volatility will be off the charts
Dogecoin has been experiencing pretty huge fluctuations, which is not surprising, given the overall instability in the crypto market.
Popular crypto analyst CryptoKaleo has forecasted a bigger drop to below 7 cents, raising alarms among investors and traders.
“Finally got the break back beneath ten cents. Price is currently hanging around support from the lows we saw last month. Still see there being a decent chance we get one last flush to sub 7 cents from here. After that – no more pain. Just a few months of chop before full send to fulfill the prophecy of $1.00+.”
At the time of writing, Dogecoin is priced at $0.08, after a painful 23.91% drop in the last 24 hours and a 38.86% decline over the past week.
Finally got the break back beneath ten cents.
Price is currently hanging around support from the lows we saw last month.
Still see there being a decent chance we get one last flush to sub 7 cents from here.
After that – no more pain. Just a few months of… pic.twitter.com/TUoCucAJOy
— K A L E O (@CryptoKaleo) August 5, 2024
Bearish outlook for Dogecoin
right now, Dogecoin’s price is below the middle Bollinger Band, signaling bearish momentum.
The widening of these bands typically suggests increased volatility. The Chaikin Money Flow stands at -0.19, showing selling pressure and capital outflow from DOGE.
This negative CMF value also supports the bearish outlook. Simply put, money is exiting the asset, traders selling.
Moreover, the Relative Strength Index is at 30.53, nearing the oversold threshold of 30.
While this could hint at a potential short-term reversal or consolidation, the overall, medium term bearish sentiment is strong.
Decreased network activity
Dogecoin’s network activity has also declined big time. The number of active addresses has dropped to around 47.3K from previous peaks of over 345K.
There are spikes in transaction counts, but generally follow a downtrend, currently at 204K. The user engagement is undoubtedly lower than usual.
Despite the bearish signals, there is some optimism. Large holders’ outflow has decreased from a peak of 192 million to 42 million, which could mean not everyone selling, so maybe there is some level of confidence left.
If Dogecoin can close above the critical support level of $0.105 on daily charts, it may reverse the downtrend and attempt to reach the $0.13 resistance level.
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