An unexpected turn of events saw meme leader Dogecoin rise by 6% amidst a weak altcoin market, only to pare gains through an indirect clarification by fast-food giant, McDonald’s. Turns out that a McDonald’s teaser was related to rapper Kanye West’s campaign and not Dogecoin, as some investors thought. Dogecoin’s uptick and the following correction were factored in on the charts and ironically, the alt was in danger of a descending triangle breakdown.
At the time of writing, DOGE traded at $0.1453, down by 4% over the last 24 hours.
Dogecoin 4-hour Chart
Unfortunately, two lower highs have threatened a descending triangle breakdown on Dogecoin’s lesser time frame. A below-par RSI combined with a bearish crossover on the MACD heightened chances of a southbound move, with potential losses ranging from 7%-13%.
Now, Dogecoin did have a chance to negate this bearish outlook. The triangle’s baseline was backed by the daily 20-SMA (not shown) and $0.1446 support has held up over the recent past. However, bulls would have to move against the tide to sustain DOGE’s value in a risk off-broader market.
A timely Elon Musk tweet, Bitcoin rally, or both, would certainly help recreate a bullish scenario. A 4-hour candle above $0.1520 and the 4-hour 200-SMA (green) would not only invalidate the triangle but also trigger a breakout in the opposite direction. The outcome could see a lower high formed at the 23.6% Fibonacci level (calculated through DOGE’s ascent from $0.0694 to $0.477).
Conclusion
More pain was expected for Dogecoin over the near term. A stronger uptrend would be possible when Dogecoin tags a demand zone between $0.1329-$0.1204.