2018-10-24 17:24 |
The famous meme-based digital currency Dogecoin has been on a downward spiral this month which has seen the coin decline from $0.006 to $0.004. The cryptocurrency which is commonly used as a tipping coin had a large spike at the start of September where it appreciated from support at $0.0022 to a high around $0.007. A bearish divergence occurred at this point where price formed a higher high, but the RSI formed a lower high. This showed price continuing to increase despite buying pressure falling off.
Momentum is currently strongly on the side of sellers. The MACD diverges to the downside, and RSI is forming lower lows and lower highs along with price action. Price action closed below the 200 EMA yesterday which acted as some support. It continues its decline today below the 200 EMA, and this indicator is likely to act as resistance if the price were to appreciate from here.
Doge Daily Chart – Source: Tradingview.comWhat is the reason for this decline? Price spiked rapidly in early September, and this seemed to be due to a correction. Dogecoin also issues about 5 Billion new coins into existence every year which makes it difficult for the coin to hold its value. It has a huge supply on top of this of over 116 Billion circulating.
The shorter-term hourly chart shows a similar picture to the daily. A continuing decline with any rises to be short-lived. Price action is trading below the hourly 50 EMA, and this may act as resistance in the event of a rise. The declines have been on larger volume than the corresponding rises. While the rest of the market mainly has a neutral outlook, Doge is looking more bearish and seems to be setting up for further downward movements.
Doge Hourly Chart – Source: Tradingview.com Key Takeaways: Doge spiked at the start of September increasing from $0.0022 to $0.007. Doge has since sharply declined losing 33% so far this month. A bearish divergence between price and RSI preceded the decline. Doge looks set for further declines after moving below the daily 200 EMA yesterday. Momentum is currently with the sellers as the MACD diverges to the downside and price and RSI form lower lows and lower highs. Doges supply and issuance model make it difficult for the cryptocurrency to hold value. DISCLAIMER: Investing or trading in digital assets, such as those featured here, is extremely speculative and carries substantial risk. This analysis should not be considered investment advice, use it for informational purposes only. Historical performance of the assets discussed is not indicative of future performance. Statements, analysis, and information on blokt and associated or linked sites do not necessarily match the opinion of blokt. This analysis should not be interpreted as advice to buy, sell or hold and should not be taken as an endorsement or recommendation of a particular asset.Dogecoin [DOGE] Declines 33% While Rest of Cryptocurrency Market Consolidates was originally found on [blokt] - Blockchain, Bitcoin & Cryptocurrency News.
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