Dogecoin has undergone a massive correction of roughly 10% in the past 24 hours, with the price nose-diving from 49.8 satoshis to 45.1 satoshis. As a result of this fall, Dogecoin has neared the floor of 43 satoshis, which if cracked, could lead to a severe collapse in the price.
But, will it? Let us find out with the help of technical analysis below.
Technical analysis implemented on the 240-minute Dogecoin/Bitcoin price chart reveals that bears are pouncing on every opportunity to jettison Dogecoin en masse. The support of 43 satoshis may well give way to a lower ground, if bulls continue to show a lack of strength.
- Bollinger Bands – The latest collapse has pierced the lower range of the Bollinger band, which is at 45.6 satoshis, after facing stiff resistance near 50 satoshis. The lower range of the BB often acts as a temporary support and hence, a relief rally cannot be ruled out.
- Simple Moving Average – The 20-4h SMA of 48.2 satoshis has yet again exerted its pressure to suppress the Dogecoin price. As can be seen from the image above, the cryptocurrency managed to close above the moving average but was immediately pulled down, leading to a failed breakout. Dogecoin has been under the intense pressure of the SMA since then.
- Relative Strength Index – The RSI indicator has dropped below the 40-mark to 37.3158 indicating that the bulls are fast losing their grip on Dogecoin.
Bulls need to make some serious efforts if a price collapse has to be averted. In the absence of that, the floor may hold temporarily due to short covering but will succumb eventually. Bears have been relentless in dumping their Dogecoins and until that changes, selling on rallies is advised with the stop-loss placed above 50 satoshis. Volatile moves may continue to make things difficult for the market participant.