For the last five months, the price of Dogecoin (DOGEUSD) has been moving inside a descending wedge, a pattern that is frequently linked to future breakouts.
Dogecoin Macro Growth
The meme currency is about to break out of this pattern, but a big price increase might take time to happen. Even during a breakout, profits may be constrained due to several market factors.
There are indications of weakness in Dogecoin's macro growth, particularly when examining technical signals such as the Average Directional Index (ADX). The ADX indicates that the DOGE active upward trend has weakened and is currently very weak. It is usually challenging for a cryptocurrency to maintain its momentum upward when the ADX is weak, which makes it hard for DOGE to maintain any positive gains.
Given the waning uptrend, not even a rupture from the falling wedge would bring big gains. Dogecoin's potential to rise could be limited if the market isn't strong enough to help it take advantage of the anticipated price spike.
DOGEUSD Onchain Metrics Analysis
Dogecoin's MVRV Long/Short Difference is presently at -20%, another element influencing the cryptocurrency's possible rebound. This indicator compares both long and short-term holders to determine profitability.
As observed with DOGE, a negative worth indicates that short-term investors are profitable whereas long-term owners are not. Short-term investors are inclined to part with assets to secure profits, but this is usually a bearish indicator because it impacts the price downward.
Given the prevailing market sentiment, which favors short-term traders, there may be more pressure to sell. If short-term investors choose to cash out, Dogecoin's price may continue to be suppressed, further postponing any possible rally.
Dogecoin may be unable to break through the crucial resistance level of 0.1161 due to its poor macro momentum and pessimistic market sentiment. Should this occur, the meme coin will probably continue to consolidate in the range of 0.0940 to 0.1160 for the predicted future.
Dogecoin Price Prediction Technical Analysis
In the daily chart of DOGE price, the recent price trades with a corrective momentum, while the major trend is still bearish.
Dogecoin is getting close to breaking out of the falling wedge pattern. Although this setup usually indicates a rally of 60% to 0.1760, the breakout might not occur as soon as expected.
In the short-term market trend, the recent price aimed higher above the 50 day Exponential Moving Average level. However, the 200 day Simple Moving Average remains flat above the 0.1161 level, suggesting a sideways movement.
In this context, a bullish continuation with a stable market above the 0.1161 level could extend the momentum at the 200 day SMA line. However, a conservative buying approach might come after overcoming the 0.1439 level.
On the bearish side, a selling pressure with a daily close below the 50 day EMA might resume the bearish trend towards the 0.0800 level.
