Dogecoin price has done well in the past few months, moving from a low of $0.100 on April 7 to $0.2630. This recovery has coincided with the recent crypto market gains and the recent launch of the DOJE ETF. This article explores why the DOGE price faces a major risk.
Dogecoin Price Technicals Points to a Drop
The daily timeframe chart shows that the DOGE price has been in a strong uptrend in the past few months. It has formed a series of higher highs and higher lows.
Dogecoin price has also remained above the 50-day and 100-day Exponential Moving Averages (EMA). Remaining above these averages is a bullish factor as it is a sign that bulls are in control.
However, there is a risk that the coin will drop in the near term. It has formed a rising wedge pattern, which happens when two ascending and converging trendlines. The two lines are about to converge, which may lead to a bearish breakout.
READ MORE: Ondo Crypto Price Forms Rare Bullish Pattern as Key Metric Surges
At the same time, the two lines of the MACD are about to have a bearish crossover. The Relative Strength Index (RSI) has moved from the overbought point at 74.12 on September 13 to the current 56, its lowest level on September 7.
Therefore, the most likely Dogecoin price forecast is bearish as long as it is inside the wedge pattern. If this happens, the coin may drop from the current $0.2630 to the support at $0.1300, its lowest level this year.
A move above the upper side of the wedge will invalidate the bearish DOGE price forecast. If this happens, the next important resistance level to watch will be at $0.4826, the highest point in November last year, which is about 85% above the current level.
DOGE Needs Fundamentals to Overcome Bearish Technicals
Dogecoin price will need strong fundamentals to invalidate the bearish technicals. One of the most notable catalysts is that Rex-Oprey launched a spot DOGE ETF last week. It has been a successful fund, accumulating over $10 million in assets under management (AUM) in the last two days.
Additionally, volume data shows that its two-day volume was over $40 million, making it one of the best-performing fund launches this year.
Its performance is also a sign that the Grayscale Dogecoin Trust, Bitwise Dogecoin ETF, and 21Shares Dogecoin ETF will be highly successful after the potential launch in October. Analysts expect that the Securities and Exchange Commission (SEC) will be approved, with the Polymarket odds jumping to over 80%.
The other notable catalyst for Dogecoin token is that the altcoin season index is in an uptrend, which may benefit top altcoins like DOGE.
READ MORE: Top Cryptocurrencies to Watch this Week: Keeta, Axelar, Aster
