Analysis: Dogecoin Drops 25% in Two Days, What’s Next?

Dogecoin, like many other cryptos, has fallen significantly. The coin now marks a 25% drop in a period of two days. You would think that the memecoin will now recover, but is that the case? Let’s take a look at the charts.

Banner Dogecoin 1

Red zone lost

We start this analysis with a look at the daily chart. We do this to get a complete picture of the price and its most important price levels. It often happens that price levels from the past later turned out to be very important. This is also the case at the moment.

Above you see three big zones: a gray, a blue and a red one. The red zone has been lost for a while now, which increased the chance of a drop to the blue zone. This was already coming a bit, since the coin already made four negative tests (indicated by orange circles) – while it often rose 40% from this zone – but we will come back to that in a moment.

At the moment, the coin is trying to hold strong in a zone it hasn’t seen in a while: the blue zone from around $0.099 to $0.105. As you can see, the coin dipped below this for a while, but was quickly bought up. As a result, DOGE is now trading for around $0.10.

Will this be another negative test?

It therefore seems plausible that most of the decline is over, but that may be an illusion. To explain this a little better, we will also look at the 4-hour chart. Here, each candle represents 4 hours, which gives us a better picture of the recent price action.

The four negative tests at the top of the red zone are even better visible here. It was therefore already plausible that the coin would fall down instead of rising 40%. The question since then is where this decline will stop.

Despite the blue zone being able to cause a rebound, the coin first fell all the way through it. It then rose a bit, but that could also eventually result in a new negative test. If that is the case, as indicated in the orange circle, the negative price action may not be over yet.

Only when Doge rises above this level, the expectation will become positive again. It is therefore a matter of waiting to see what the coin will do now. Therefore, keep a close eye on these levels and the price.

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