Popular cryptocurrency analyst and trader, Crypto Daily Trade Signals, issued a statement warning To the Dogecoin community about the potential downside risks of the popular meme-inspired crypto asset as it faces a bearish technical pattern amid broader negative sentiment in the digital asset market recently.
Dogecoin is forming a bearish descending triangle pattern
Crypto Daily Trade Signals analysis goes in depth DogecoinCurrent market structure, identifying the formation of a descending triangle pattern. The descending triangle is characterized by a series of lower highs that push against a flat support level currently located at $0.121, and is usually seen as a bearish continuation signal.
According to the expert, although the triangle base at $0.121 provides strong support for DOGE, the current bearish market conditions caused by… Bitcoin, the largest cryptocurrency asset, could render it meaningless. Moreover, he noted that after testing the support level about 3 times, investors are hoping that the level will hold this time.
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DOGE price was previously trending inside a giant descending triangle. The triangle base provides strong support for DOGE but the prevailing bearish market conditions created by Bitcoin may render it useless. The support has been tested three times before and investors are hoping it will hold water now.
The Crypto Daily Trade signal also confirmed another downtrend for the asset's price, indicated by the DOGE trend below the 50-day and 200-day simple moving average (SMA).
It is important to note that triangles that are falling are usually not bullish, but when they trend upward, they usually lead to an explosive rally. The analyst believes that if there is a recovery at this price point Doug It may break out of the current market structure and reach $0.237. However, the crypto asset's path to the upside may not be easy as Crypto Daily Trade signals have indicated two important resistance levels at $0.182 and $0.206.
Meanwhile, if the cryptocurrency assets fail to rebound and fall below the triangle base, the expert expects a decline towards the $0.96 price level and even the $0.072 price level in the coming days.
Increasing pessimism by investors
Given that Dogecoin is having difficulty regaining momentum, this technical analysis comes at a critical time for Dogecoin. Same angle. The general market decline has exacerbated the difficulties, as investors continue to lose confidence in the short-term potential of cryptocurrencies.
As DOGE continues to navigate this descending triangle, the next few days will be crucial in determining whether the asset can withstand downward pressures or succumb to a steeper decline.
At the time of writing, DOGE has attracted positive sentiment, trading at $0.125, showing a 2.79% increase in the past day. Although its market capitalization increased by more than 2%, its trading volume decreased by more than 34% in the past day. The bullish momentum seen in the meme market today suggests that DOGE could be in a position to attract further gains in the coming days.
Featured image from Adobe Stock, chart from Tradingview.com