Dogecoin price has moved sideways in the past few weeks and is hovering at a crucial support level. DOGE was trading at $0.1367 on Sunday, down by 70% from its highest level in 2024, and a risky pattern points to more downside in the near term if it loses a key support.
Dogecoin Price Technical Analysis Points to a Bearish Breakdown
The weekly chart shows that DOGE price has come under pressure in the past few months, moving from a high of $0.4952 in 2024 to the current $0.1367.
DOGE has moved below the 50-week Exponential Moving Average (EMA), a sign that bears remain in control. It has also remained below the Supertrend indicator, one of the most accurate trend indicators in technical analysis.
Most importantly, the token has formed a head-and-shoulders pattern whose head is at $0.4952 and shoulders are at $0.2267. It is now hovering near its neckline, which is an ascending trendline connecting the lowest swings in August and October 2023, August 2024, and October last year.
Therefore, a drop below this ascending trendline will confirm the pattern’s bearish outlook and point to more downside, potentially to the key support level at $0.0560, its lowest level in September 2022 and August 2023. This target is about 60% below the current level.
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On the positive side, failure to move below the ascending trendline will invalidate the bearish outlook and point to more upside, potentially to the right shoulder at $0.300.
DOGE ETF Inflows Have Stopped
One of the main reasons why Dogecoin price may have a bearish breakdown is that demand for spot DOGE ETFs has faded. Data shows that the Grayscale and Bitwise DOGE funds have had no inflows since January 9.
The two funds have now added $6.5 million in net inflows since their inception in November last year. They now have over $10 million in assets, which is equivalent to 0.04% of its market capitalization.
The funds are the worst performers in terms of inflows. For example, the Canary Litecoin ETF has accumulated over $10 million in inflows, while the HBAR ETF has gained over $85 million in inflows. Also, the spot Chainlink ETFs have added over $66 million in inflows.
Dogecoin has largely lost momentum because it has not made any headlines in the past few months. Elon Musk, who used to promote the token, has remained muted on the coin. Also, companies that announced DOGE treasuries like Bit Origin and Neptune Digital Assets have not made any purchases.
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