Dogecoin (DOGE) Embarks on a Downward Spiral with Technical Indicators Raising Concerns

Dogecoin has recently experienced a significant correction, dropping by 14% from recent highs. A technical analysis of the DOGE/USDT daily chart reveals several bearish signals that point to further potential declines.

Resistance Rejection and Weak Buying Pressure

DOGE's inability to sustain prices above the $0.28 resistance level suggests a lack of buying pressure. This rejection has resulted in a substantial decline, indicating that sellers are currently in control of the market.

Bollinger Bands Indicate Increased Volatility and Bearish Momentum

The price action is approaching the lower Bollinger Band, which often signals increased selling pressure. The widening of these bands suggests increasing volatility, which typically precedes continued price movement in the prevailing direction. As DOGE trades near the lower band, bearish signals are amplified, pointing to potential further downside or consolidation at lower prices.

MACD Confirms Bearish Sentiment

The MACD indicator is firmly in bearish territory, with the signal line (orange) crossing below the MACD line (blue) and the histogram remaining negative. These factors collectively support the current downward momentum. Without any visible reversal signs in this indicator, the downtrend is likely to continue in the short term.

Support Levels to Monitor

A descending trendline on the chart acts as significant resistance, constraining DOGE's price within a downward channel. Currently, DOGE is testing a crucial support zone around $0.24, a critical juncture for the cryptocurrency.

Should this support level break, traders may expect further declines toward $0.20 and potentially $0.15 based on historical support levels.

Outlook for DOGE

Dogecoin is currently in a strong short-term downtrend, with multiple technical indicators suggesting continued weakness. The recent rejection at $0.28 followed by a significant 14% decline confirms the dominance of sellers in the market. If the current support at $0.24 fails to hold, DOGE could face further declines toward $0.20 or lower levels.

To reverse this bearish trend, DOGE would need to decisively break above the descending trendline and establish support above $0.28. Until these conditions are met, caution is advised for DOGE investors.