Following the general trend of the cryptocurrency market, Dogecoin price has been stuck in a sideways movement for some time. Most of the time, the downside outweighs the recovery opportunities and this is pushing us towards important support levels. Amid this situation, meme coins have shown a lot of weakness, and the overall trend remains bearish overall, favoring further price declines.
Why does Dogecoin crash without recovering?
With Dogecoin’s price already struggling, crypto analyst RLinda believes that bears may continue to prevail for some time. He pointed to the fact that the price has since consolidated between two key levels, $0.1763 and $0.118, but no major moves have been seen yet. This indicates that it is leaning bearish rather than bullish and could cause a drawdown.
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Looking into the technical side of things, cryptocurrency analysts indicate that there is nothing to suggest that Dogecoin’s price is likely to rise. So far, we are seeing a more bearish trend for price, with lower highs and lower lows forming. Although there has been some recovery, sustainability remains an issue as momentum tends to fade quickly after it appears.
At the moment, RLinda points to a possible move upwards to remove liquidity, but there is no sign that this move will be sustained as well. The analysis notes that the liquidity pool that emerged after the local consolidation at the beginning of the month has increased by $0.188. Naturally, prices can rise quickly to absorb this level of liquidity, but they can also fall just as quickly.
The reason why Dogecoin price could reverse from its rally is the fact that this $0.188 liquidity could act as a resistance to the uptrend. In this case, increasing bearish pressure can quickly take over and cause a rapid reversal. In this case, cryptocurrency analysts believe that Dogecoin price could plummet from $0.188 to $0.165 before finding support.
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The two key levels to watch from here are the support at $0.1763, which needs to hold for a recovery to occur. And $1.188 acts as a resistance level that needs to be broken to sustain the breakout. “If the market does not allow the price to move higher, it is worth keeping an eye on the support level at 0.17635,” RLinda said. “Consolidation below this level could falsely confirm a break through the lower levels and trigger a decline.”
Featured image from Dall.E, chart from Tradingview.com
