- Following the rejection at the 50 SMA, Dogecoin is moving toward a triangle breakdown.
- The short-term support weakens amid the persistent hammering from the bears.
- A formidable ‘buy’ zone is around $0.03, as highlighted by the symmetrical triangle target.
Dogecoin was the hottest topic in the cryptocurrency industry in February. It was mentioned on Twitter a lot more than Bitcoin while enjoying Tesla founder Elon Musk’s support. However, that hype has cooled down, leaving the ‘Meme Coin’ in the forces of demand and supply.
The technical outlook is bearish, suggests that a massive downswing is around the corner in spite of the Dallas Mavericks announcement that it will accept DOGE as payment.
Dogecoin stares into the abyss on nearing a technical breakdown
The 4-hour chart has this week printed a symmetrical triangle. This pattern is both bearish and bullish. Earlier this week, it seemed as though Dogecoin could lift off to $0.07. However, the resistance at the 50 Simple Moving Average (SMA) sabotaged the bullish narrative.
A correction is currently underway with Dogecoin closing in on a potential triangle breakdown. Note that slicing below the lower trendline may trigger massive sell orders. Increased selling pressure coupled with the impact of a breakdown from the triangle will send DOGE on a spiral to $0.03.
DOGE/USD 4-hour chart
The IOMAP model reveals that Dogecoin’s upside is extremely bearish. This model tracks the number of addresses and the coins they purchased within various price ranges in the past””the clusters of the addresses and the volume highlight vital resistance and support areas.
For instance, the region between $0.049 and $0.05 shows that roughly 67,000 addresses had previously bought around 9 billion DOGE. Therefore, any attempt to rise above this zone might end in futility due to the selling pressure.
On the downside, Dogecoin is sitting on weak support areas, which adds credence to the bearish narrative. The model directs our attention to the region running from $0.43 to $0.44. Here, around 1,400 addresses had previously purchased approximately 1 billion DOGE.
Dogecoin IOMAP model
Looking at the other side of the fence
Maverick’s owner, Mark Cuban, has confirmed the business will start accepting Dogecoin as means of payment. On a light note, Cuban said told Bloomberg that “sometimes in business you have to do things that are fun.” Besides, Dogecoin, Mavericks has been accepting Bitcoin since 2019.
The news is fundamentally strong for DOGE, keeping in mind that it has been riding on Elon Musk’s hype. In other words, the potential breakdown to $0.03 may be canceled by this public support, adding credibility to the Meme Coin.