DOGE, currently the largest meme coin in terms of market value, has taken its share from the recent market downturn. As today is coming to an end, BTC has once again dropped below $26,000, weakening the hopes of altcoin investors for a recovery. So, what’s next for DOGE?
The Dogecoin (DOGE) Disaster Scenario
Meme coins generally do not attract long-term investors, but DOGE is an exception. Due to being the first meme coin and the support it receives from Elon Musk, it has a significant number of long-term investors despite its speculative movements. However, investors who bought DOGE in the past 2 years continue to multiply their losses.
The DOGE price is at risk of breaking below a long-term descending triangle formation. If this happens, we may see a 50% drop in price. Weekly time frame readings clearly indicate a downward trend, while the readings on the daily chart were relatively promising.
DOGE Price Prediction
Since June 2022, the price has been hovering slightly above $0.059, testing the support zone multiple times. The long lower wicks indicate the involvement of bulls. This is actually a clear bullish signal, but the DOGE price has been constrained by a declining resistance trendline since November 2022. This situation has led to the formation of a descending triangle on the weekly chart along with the $0.059 support.
The above formation indicates a bearish move. If the worst-case scenario for DOGE occurs, we could see a sharp drop towards $0.03. However, convincing closures below the mentioned support level should be observed for this to happen.
FTX is approaching liquidation and the bankrupt exchange holds $42 million worth of DOGE. In these days of significantly diminished volumes, such a multi-million dollar sell-off could push the price below the support zone, leading to panic selling. In fact, the daily cumulative volume for DOGE is only around $240 million.
The bullish expectation on the daily chart indicates a possible short visit to $0.07. However, the most critical level for investors will remain the $0.059 support. The upcoming Fed meeting next week and the August inflation data to be released in a few hours may increase market volatility.
