Dogecoin’s price is stuck in a bear market after plunging by over 36% from its year-to-date high, and two emerging patterns point to a strong breakdown as demand wanes.
Summary
- Dogecoin price could be on the verge of a strong bearish breakout.
- The coin has formed a bearish pennant pattern on the daily chart.
- It is also about to form the risky death cross pattern on the daily timeframe.
Dogecoin price forms two risky patterns
The daily chart shows that the Dogecoin (DOGE) price has been in a downtrend this month. This crash may continue as a death cross pattern nears, with the spread between the 50-day and 200-day Weighted Moving Averages narrowing.
The last time that the DOGE price formed this risky pattern was in February this year, and the coin dropped by 50% after that.
The Dogecoin price is also forming a bearish pennant pattern, characterized by a vertical line and a symmetrical triangle. The two lines of this triangle are now nearing their confluence levels, where bearish breakouts usually happen.
DOGE’s price remains below the Supertrend indicator, indicating that bears are in control. Therefore, the most likely scenario is a strong bearish breakout, potentially to this month’s low of $0.1493, which is ~25% below the current level.
DOGE demand is waning
One potential reason why the Dogecoin price may crash soon is that the demand is waning. A good example of this is in the futures market where the futures open interest has tumbled.
Data compiled by CoinGlass shows that its futures open interest has crashed below $2 billion since October 10 this year. Before that, the interest was consistently above $4 billion, as demand remained elevated.
The same trend has happened in the spot market, where the daily volume tumbled to $2.7 billion on Oct. 26, down from this month’s high of $20.45 billion.
Meanwhile, the recently launched REX-Osprey DOGE ETF has lost traction, with no inflows over the past few days. Its assets under management have remained at $32 million in the past few weeks.
In contrast, the REX-Osprey XRP ETF has already crossed the $100 million milestone. The two funds were launched on the same day.
There are concerns that the Dogecoin price lacks a clear catalyst beyond the potential approval of additional ETFs by the SEC.
