Potential 10% Drop in Dogecoin Price Amid Lower Buying Pressure
DOGE: Price Drop and Forecasts Indicate 10% Loss
The cryptocurrency Dogecoin (DOGE) is showing signs of a price drop. Forecasts suggest a loss of 10%. But what are the reasons for this and how reliable are these predictions?
The Current Situation of Dogecoin
Although Dogecoin has a bullish structure, the buying pressure has decreased. Should Bitcoin prices recover, DOGE would likely follow. On January 21, Dogecoin reached a high of $0.0905. This was a critical resistance zone and although the market structure was bullish, a decline to the local lows was possible.
The recent gains that raised the price to $0.09 came after X (formerly Twitter) launched its official XPayments handle. At the time of the press release, the price of the meme coin was $0.0838, just above the support zone of $0.081.
Technical Indicators and Liquidity Charts
The technical indicators do not suggest a strong price drop, but the liquidity charts suggest the opposite. The RSI (Relative Strength Index) on the 12-hour chart was 49 at the time of the press release. This was an early signal for a change in momentum, but the latest trading session was not yet complete. Therefore, there is a chance that the bulls could fend off the bearish pressure in the coming hours.
Potential for Further Price Drop
The rejection from the 78.6% Fibonacci retracement level was a strong sign that a downtrend is underway. Alternatively, Bitcoin was close to the lows of a seven-week range, which means a price increase could also pull DOGE higher. However, if there is no bullish reaction soon, there could be a further price drop of 10%.
What Traders Should Note
If the bulls cannot hold the $0.0795 level, a decline to the $0.073 zone would likely occur. Therefore, traders should be cautious. The price charts on a shorter time basis showed that a drop below $0.0809 would be a bearish signal. Until then, however, buyers could get a discount on Dogecoin, whose prices could recover.
Disclaimer: The information presented here does not constitute financial, investment, trading, or any other types of advice and is solely the opinion of the author.
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