Dogecoin’s price is currently trapped in a bearish reversal pattern, potentially leading the meme coin to revisit its previous lows.
Sometimes, bearish market trends are altered by investors. However, this time, investors’ behavior does not appear very bullish either.
Dogecoin Will See Some Drawdown
Dogecoin price is exhibiting signs of an increase on the 8-hour chart, but when the extended candlesticks are taken into consideration, a bearish pattern forms. To make it worse, investors may not be able to invalidate it either.
This is because the rising profits will likely trigger profit-taking among DOGE holders. The same can be observed in the Market Value to Realized Value (MVRV) ratio.
The MVRV ratio gauges investor profit/loss. Dogecoin’s current 30-day MVRV stands at 9.2%, indicating profit, which may trigger selling. Historical data suggests DOGE corrections typically happen within the 8% and 18% MVRV range, labeling it a danger zone.
Thus, as the price and profits climb, MVRV will, too, and so will investors’ potential to sell.
Read More: How To Buy Dogecoin (DOGE) With eToro: A Complete Guide
This is further substantiated by the total supply in profits. At times, when the profitable supply hits 95% of the total circulating DOGE, a market top is formed, which is synonymous with corrections as the market cools down.
Given that the profitable supply is at 90% at the moment, it would not be surprising if the coming days note a market top. This would further increase the bearishness, which could lead to a decline in price.
DOGE Price Prediction: A 40% Correction
Dogecoin’s price at the time of writing is trading at $0.206. Although recent gains might suggest an impending rally, a longer-term timeframe indicates otherwise. The meme coin is currently stuck in a rising wedge.
This bearish reversal pattern is characterized by converging trend lines slanting upward. It suggests a significant downward price movement, indicating weakening momentum.
According to this pattern, the target for Dogecoin price is set at $0.127, which marks a near 40% correction.
Read More: Dogecoin (DOGE) vs Shiba Inu (SHIB): What’s the Difference?
However, if the pattern breaches through the upper trend line’s resistance or tests $0.22 as a support floor, invalidation of the bullish thesis is likely. Consequently, Dogecoin price will continue rallying towards $0.24 and beyond.
Disclaimer
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