If one looks at the Dogecoin (DOGE) charts from the point of view of a financial chartist, one will notice an alarming presence of a classic bearish structure.
For example, pseudonymous analyst Tyler Durden highlighted what appears to be a “Head and shoulder“pattern. The trading structure is formed when an asset forms three peaks above the same support level. In doing so, its average peak turns out to be higher than the other two.
Durden showed the head and shoulder pattern to predict a 67% price drop in the Dogecoin market.
By calling it “programmed,” the analyst implied on the trend of the pattern to collapse assets once it breaks below $ 0.299, the support level.
Normally, the downside target in such a case becomes equal to the height of the pattern. In the case of Dogecoin, the maximum length between the top and the support level of the Head and Shoulder pattern turned out to be $ 0.197.
That shifts the downside target of the Head and Shoulder pattern lurking near $ 0.05, as Durden highlighted.
“Even Elon [Musk] you can’t save this with your tweets. He tried, and each time created another lower high, “he said.” 0.05 is programmed “.
In detail, the DOGE / USD exchange rate corrected just over 60% after peaking on May 8 at $ 0.76. The $ 0.76 increase in itself came as part of a 16.462% price explosion if measured from early 2021.
Meanwhile, from its pandemic-led low of $ 0.00112 in March 2020, Dogecoin’s net returns up to $ 0.76 turned out to be 67,757.14%. The huge advantage made the so-called prank cryptocurrency the best performing financial asset on the planet, outperforming even the combined returns of Bitcoin (BTC), S&P 500, Nasdaq Composite, and gold.
What worked as a bullish catalyst for Dogecoin were nothing more than tweets from Elon Musk, a billionaire entrepreneur who sent several messages of support in favor of the cryptocurrency during its multi-million dollar price rally.
no problem pic.twitter.com/e2KF57KLxb
– Elon Musk, the second (@elonmusk) February 4, 2021
On April 28, the CEO of Tesla proclaimed himself a “Dogefather,” causing Dogecoin prices to rise 18% on the same day. Prior to that, Musk’s decision to work with Dogecoin developers to improve the efficiency of their transactions resulted in an intraday price increase of 25.25% on May 13.
But the Musk-led bomb, akin to a frenzy, also left Dogecoin with little chance of setting sustainable minimum prices.
Making an exception, DOGE / USD held the $ 0.040- $ 0.047 area in February-March 2021, following its 50% further downward correction from the all-time high of $ 0.1. After eight weeks of holding the range as support, the pair resumed its bullish rally, finally reaching $ 0.76.
Therefore, before hitting Durden’s $ 0.01 price target, Dogecoin anticipates finding buyers in the $ 0.040-0.047 area, due to its brief but historical significance as a support range.
Related: Has the Doge Had His Day? Dogecoin interest cools
Meanwhile, DOGE / USD is also holding a tentative support confluence defined by the $ 0.25-0.27 range and the 20-week exponential moving average (20-day EMA; the green wave in the chart above).
Meanwhile, The Asian Investor, a pseudonymous analyst, does not expect technical levels to prevent Dogecoin from falling harder. In his alpha seeker piece published earlier this month, the pseudonymous analyst called Dogecoin a pump-and-dump token, adding that the cryptocurrency would eventually crash to zero. Excerpts:
“With new pump and dump” opportunities “popping up every other day, it’s not very attractive to invest [in] an “asset” that has already risen so much. Expect Dogecoin to drop to $ 0 this year and slowly die. “