The DOGE price could drop 60% by the end of this year!Hello traders, today I would like to explain to you something that may cool your views on this year's increases ;)
Dogecoin grows 150% in 6 days, but be careful because it is now the most "bought" since April 2021
The DOGE price could drop 60% by the end of this year as it reached its highest overbought level since April 2021.
According to the classic technical indicator, Dogecoin's ongoing price rises are starting to look overburdened.
The Relative Strength Index (RSI), a momentum indicator that measures the degree of recent price movements to analyze overbought or oversold levels, rose to 93.69 on Dogecoin's daily chart. This is the highest level since April 2021, a month before the DOGE price hit a record high of $ 0.75.
Therefore, the "overbought" state does not necessarily mean an immediate bearish reversal. However, they reflect the current euphoric buying dynamics in the market, which sooner or later pushes the price to a sideways trend or a downward correction.
Dogecoin's 2018-2020 bear market on a weekly chart sheds light on similar price action. It's worth noting that the DOGE crashed almost 95% almost two years after it peaked at $ 0.0194 in January 2018.
During the token correction period, the trend was visible in the downstream channel. It broke out of the upward range in July 2020 but followed the bullish move with a sideways consolidation trend - between Fib 0.0022 and 0.236 Fib $ 0.0054 - through December 2020.
By comparison, the ongoing bear market on the Dogecoin token is shorter but follows a similar trend trajectory to the 2018-2020 period, as shown above. Therefore, DOGE may fluctuate in its current 0-0.236 Fib line range (or in the range of $ 0.055-0.176) after breaking the downward channel.
In other words, DOGE could correct the rate to $ 0.055 by the end of this year, which is about 60% down from current price levels, if the fractal works as intended.
Conversely, an immediate break above the 0.236 Fib line could lift DOGE to $ 0.25 as another uptrend.
Good luck
