122 Interactions, 2 today
The meme cryptocurrency has fallen by more than 60% from its peak on May 8, and one expert says it has another 60% to fall.
If a financial chartist examines Dogecoin (DOGE) charts, he or she will discover an ominous presence of a typical bearish pattern.
For instance, pseudonymous analyst Tyler Durden highlighted what appears to be a “Head and Shoulder” pattern. The trading structure forms when an asset forms three peaks atop the same support level. In doing so, its middle peak comes out to be higher than the other two.
Durden flashed the Head and Shoulder-like pattern to predict a 67% price crash in the Dogecoin market.
Calling it “programmed,” the analyst hinted at the pattern’s tendency to crash the assets once it breaks below $0.299, the support level.
Typically, the downside target in such a case comes to be equal to the pattern’s height. In Dogecoin’s case, the maximum length between the Head and Shoulder pattern’s top and support level came out to be $0.197.
That shifts the Head and Shoulder pattern’s downside target lurks near $0.05, as Durden highlighted.
“Even Elon [Musk] can’t save this with his tweets. He’s tried, and each time he just created another lower high,” he said. “0.05 is programmed.”
In detail, the DOGE/USD exchange rate corrected by a little over 60% after topping out on May 8 at $0.76. The run-up to $0.76-top itself came as a part of a 16,462% price explosion if measured from the beginning of 2021.
Meanwhile, Dogecoin’s nett returns till $0.76 were 67,757.14 percent from its pandemic-driven March 2020 low of $0.00112. The so-called joke cryptocurrency became the best-performing financial asset on the globe, outperforming even the aggregate returns of Bitcoin (BTC), the S&P 500, the Nasdaq Composite, and gold.
Elon Musk’s tweets, a billionaire entrepreneur who put out numerous supportive remarks supporting the cryptocurrency throughout its multi-thousand percent price increase, acted as a positive trigger for Dogecoin.
On April 28, Tesla CEO Elon Musk dubbed himself “Dogefather,” pushing Dogecoin prices up 18% on the same day. Previously, Musk’s commitment to collaborate with Dogecoin developers to enhance transaction efficiency led in a 25.25 percent intraday price increase on May 13.
However, the frenzy-like, Musk-led surge also left Dogecoin with little chance of establishing long-term price floors.
DOGE/USD, as an example, held the $0.040-$0.047 range in February-March 2021, following a 50 percent-plus bearish drop from the then-all-time high of $0.1. After eight weeks of holding the range as support, the pair continued its upward movement, finally reaching $0.76.
As a result, Dogecoin expects finding buyers around the $0.040-0.047 range before reaching Durden’s $0.01 price objective, owing to its limited but historical significance as a support zone.
Meanwhile, the DOGE/USD pair is trading at an interim support level established by the $0.25-0.27 area and the 20-week exponential moving average (20-day EMA; the green wave in the chart above).
Meanwhile, The Asian Investor, a pseudonymous analyst, does not expect the technical levels to keep Dogecoin from crashing harder. In his Seeking Alpha piece published earlier this month, the pseudonymous analyst called Dogecoin a pump-and-dump token, adding that the cryptocurrency would eventually crash to zero. Excerpts:
“With new pump-and-dump “opportunities” popping up every other day, it is not very appealing to invest [in] an “asset” that has already risen this much. Expect Dogecoin to fall towards $0 this year and die a slow death.”