Following the general trend of the crypto market, Dogecoin price has been in sideways action for a while now. Typically, there has been more dominance on the downside compared to any chance of recovery, and this has pushed the price towards critical support levels. Amid this, the meme coin has shown a lot of weakness and the overall trend remains generally bearish in favor of further price decline.
Why Dogecoin can crash instead of recover
With the Dogecoin price already struggling, says crypto analyst RLinda believes that the bearish action may continue to dominate for a while. She points to the fact that the price has since consolidated between two key levels of $0.1763 and $0.118, but no major moves have occurred yet. This shows that the price is leaning bearish instead of bullish and could cause a drawdown.
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Looking at the technical side of things, the crypto analyst shows that there is nothing to indicate that the Dogecoin price could see a move upwards. So far, lower highs and lower lows have emerged, a trend that is more bearish for the price. Although there has been a slight recovery, sustainability remains a problem Momentum tends to diminish just as quickly as it emerges.
For now, RLinda points to the possibility of an upward move to remove liquidity, but there are no indications that this move will last. The analysis highlights the growing liquidity pool of $0.188, which emerged after the local consolidation at the beginning of the month. Naturally, the price can rise quickly to absorb the liquidity at this level, but it can also fall again quickly.
The reason why Dogecoin price could recover from the climb is the fact that this $0.188 liquidity could prove to be resistance to the uptrend. In this case, mounting bearish pressure could quickly gain the upper hand, causing a quick reversal. In this case, the crypto analyst believes that the The price of Dogecoin could fall again from $0.188 to $0.165 before support is found.
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From here, the two important levels to look at are the support at $0.1763, which must be held before any recovery can take place. Next, $1,188 serves as the resistance that must be broken in order to sustain the breakout. “If the market does not allow the price to rise, it is worth looking at the support level at 0.17635,” Rlinda said. “Consolidation below this level will confirm the false breakout from the lower level and could trigger a decline.”
Featured image of Dall.E, chart from Tradingview.com