Dogecoin (DOGE) Poised for 21% Drop, Bearish Setup Confirmed?

Dogecoin (DOGE) Price Prediction: A Bearish Outlook?

Despite a recent 16% price drop, Dogecoin, the leading meme cryptocurrency, shows signs of continued downward pressure. This bearish outlook stems from a bearish head and shoulders pattern forming on the daily chart, coupled with a generally negative market sentiment.

Dogecoin (DOGE) Technical Analysis

CoinPedia's technical analysis indicates a bearish trend for DOGE, highlighting a classic head and shoulders pattern on the daily chart. A significant price breakdown appears imminent.

Source: Trading View

If DOGE breaks below the neckline of this pattern and closes a daily candle below $0.16, a further 21% drop to $0.13 is possible, based on current momentum and historical price action. The coin currently trades below the 200-day Exponential Moving Average (EMA) on both daily and four-hour charts, reinforcing the bearish trend. Traders often exploit this setup to sell or short DOGE on any upward price movements.

Current Market Conditions

At the time of writing, DOGE is trading near $0.168, down 1% in the last 24 hours. Trading volume has also decreased by 60% during this period, suggesting reduced investor participation, likely due to the bearish sentiment.

$6 Million DOGE Outflow: A Contrarian Signal?

Interestingly, despite the bearish outlook, on-chain data from Coinglass shows a potential accumulation of DOGE.

Source: Coinglass

Approximately $6.11 million worth of DOGE flowed out of exchanges in the past 24 hours. This significant outflow could indicate accumulation by investors, potentially leading to increased buying pressure. However, the overall bearish market sentiment might hinder any sustained upward momentum.