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Friday, September 29, 2023

Dogecoin (DOGE) Price at Risk: FTX Liquidation and Its Impact on Long-Term Support

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The DOGE price risks breaking down from a long-term descending triangle pattern. This could trigger a 50% price decrease.

While the weekly timeframe readings are decisively bearish, the daily timeframe offers hope for a potential bullish trend reversal.

Will DOGE Break Down From Long-Term Bearish Pattern?

The weekly technical analysis for DOGE’s price movement indicates that it has been hovering slightly above the $0.059 support level since June 2022. This support has been confirmed multiple times, bolstering its significance. Notably, the most recent confirmations, marked with green icons, featured long lower wicks, suggesting increased buying activity.

Despite this apparent bullish behavior, DOGE has also been constrained by a descending resistance trendline since November 2022. This, in combination with the $0.059 support, forms a descending triangle pattern, typically viewed as bearish. Over this period, DOGE has established several lower highs, signaling a loss of upward momentum. Furthermore, the DOGE price has nearly returned to the $0.059 horizontal area, negating the gains from its most recent bounce.

A breakdown that travels the pattern’s entire height (white) would potentially lead DOGE’s price down to $0.030. To validate this breakdown, DOGE must close below the $0.059 horizontal support level.

The weekly Relative Strength Index (RSI), which gauges momentum, supports the notion of a potential breakdown. Traders often use the RSI to assess whether an asset is overbought or oversold, guiding their buying or selling decisions. The RSI is below the 50 mark (red circle) and declining, both indicative of a bearish trend.

The upcoming FTX liquidation could negatively impact the meme coins price since the exchange has reported $42 million worth of assets in Dogecoin. These Dogecoin FTX holdings could potentially catalyze the breakdown if the liquidation occurs.

Dogecoin (DOGE) Price Range

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