Head And Shoulders Alert: Dogecoin Could See A Price Crash Soon
25 Abril 2024 - 4:30AM
NEWSBTC
Crypto analysts are sounding the alarm on Dogecoin as a classic
chart pattern, known for predicting bearish trends, has emerged.
Technical analyst Josh Olszewicz, @CarpeNoctom, flagged a potential
Head and Shoulders (H&S) formation on the DOGE/USD 12-hour
chart on X, hinting at a possible significant price drop if the
pattern validates. The H&S pattern is a technical indicator
traditionally viewed as a bearish signal within the trading
community. The pattern is composed of three peaks, with the central
peak (the head) being the highest and the two outside peaks (the
shoulders) being lower and approximately equal in height. The line
connecting the lowest points of the two troughs (the neckline) can
be horizontal or sloped and represents a critical support level.
Dogecoin Must Hold $0.14 In the case of Dogecoin’s 12-hour chart,
the price has completed the left shoulder and the head, with the
right shoulder currently forming. The neckline of this H&S
pattern is identified at approximately $0.14, as annotated by
Olszewicz. This level is crucial; a decisive break below could
confirm the bearish forecast suggested by the H&S formation.
Another technical detail present on the chart is the Fibonacci
retracement levels, which are horizontal lines indicating where
support and resistance are likely to occur. They are based on
Fibonacci numbers, a sequence famous in mathematics and nature for
its proportionality. Related Reading: Expert Forecasts 700% Growth
For Dogecoin (DOGE) As It Sets Sights On $1 Target Here, the 0.5
Fibonacci level aligns with the left shoulder around $0.18, while
the 0 level coincides with the peak at approximately $0.23. These
levels are key to determining the potential support and resistance
areas in the market. Olszewicz has also highlighted a projected
target area based on the H&S pattern’s typical behavior. This
bearish target is identified using the height of the pattern from
the head’s peak to the neckline, projected downward from the point
of the neckline break. The target box, marked in green, shows a
potential decline to $0.10 to $0.09, coinciding with the 1.618 and
2.0 Fibonacci extension levels. A fall to this level could lead to
a price crash of 40%. The importance of the H&S pattern lies in
its reliability as a trend reversal signal. It validates when the
price breaks below the neckline following the formation of the
right shoulder. For traders and investors alike, this pattern
serves as a cautionary tale to brace for potential downside risks.
Related Reading: Dogecoin To $1: Analyst Thinks Dream Milestone
Could Be Hit In Coming Weeks As of the latest chart by Olszewicz,
the neckline has not been breached, and the pattern has yet to be
confirmed. It is critical for observers to watch the $0.14 level
closely, as a break below it would likely activate a sell-off,
fulfilling the H&S prophecy. However, until such a break
occurs, the pattern remains a watchful indicator rather than a
confirmed trend reversal. In summary, Dogecoin’s price chart is
showing signs that could concern bullish investors. If history is
any guide, the emerging H&S pattern, closely watched by
analysts like Olszewicz, suggests a possible downward move in
Dogecoin’s value in the near future. However, only a decisive break
below the neckline will validate this pattern, turning a watchful
eye into a bearish outlook. At press time, DOGE traded at $0.1509.
Featured image created with DALL·E, chart from TradingView.com
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