The leading meme coin, Dogecoin (DOGE), has seen its value climb by 12% in the past week. Among the top 5 meme assets by market capitalization, it ranks just behind Dogwifhat (WIF) in growth over the last seven days.
However, the emergence of a death cross on its daily chart hints at the possibility of a price reversal in the short term.
Dogecoin Flashes Bearish Signal, But There is a Catch
Readings from Dogecoin’s daily chart show that on July 17, its 50-day small moving average (SMA) (yellow line) crossed below its 200-day SMA (blue line).
When an asset’s 50-day SMA crosses below the 200-day SMA, it is called a “death cross.” This is a bearish signal suggesting that the asset’s short-term price rally is weakening and might be gearing up for a downtrend. Traders interpret it as a sign to exit long and take short positions.
However, readings from other key indicators suggest that the bulls remain in control of the bull market. For example, the coin’s Awesome Oscillator returns green upward-facing histogram bars at press time, confirming the bullish bias toward the meme coin.
This indicator measures an asset’s price momentum. Green bars indicate a bullish signal. It suggests that the market’s short-term momentum is stronger than the longer-term momentum, indicating that buying pressure is increasing.
Also, DOGE’s rising Chaikin Money Flow (CMF) shows steady liquidity inflow into the market. At 0.23 at press time, the indicator’s value indicates capital inflow into the meme coin’s market, which may help sustain the current rally.
Read More: Dogecoin (DOGE) vs Shiba Inu (SHIB): What’s the Difference?
While these bullish signs suggest that the death cross might be a false signal, caution is advised. It may also mean the risk of a temporary price correction within an overall uptrend.
DOGE Price Prediction: The Meme Coin Is at Crossroads
If the death cross is not a false signal and a decline ensues, DOGE’s price may fall to $0.12. If the bulls fail to defend this price level, it may plummet further to a six-month low of $0.09.
Read More: Dogecoin (DOGE) Price Prediction 2024/2025/2030
However, if the death cross ends up being a false signal, and the bullish bias towards DOGE persists, its price may rally to $0.14.
Disclaimer
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