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DOGE bears gather strength for another downswing

  • Dogecoin price remains in the red for the third day in a row.
  • A wall of resistances on the 4H chart keeps DOGE exposed to downside risks.
  • DOGE bears target the next support at $0.26 amid bearish RSI.

Dogecoin (DOGE/USD) sellers appear to take a breather, although remain on the defensive so far this Sunday, especially in light of Wednesday’s massive crash.

During the midweek market meltdown, DOGE price lost as much as 55% at one point before closing the day 30% lower around $0.33.

Elon Musk, Tesla Inc’s founder, tweets in the aftermath of the crash failed to offer any respite to the meme-based coin, as China’s regulatory clampdown on the crypto markets outweighed the optimistic remarks from the world’s third-richest person.

“Yeah, I haven’t & won’t sell any Doge,” Musk said on Twitter in response to a tweet on Thursday claiming he would never sell any of his doge holdings and that he was the “ultimate hodler”.

The sixth-largest digital currency, with a market capitalization of $43.67 billion has immensely benefited by the celebrity endorsement so far this year, as it remains Musk’s most favorite crypto coin.  

DOGE/USD: Risks remain skewed to the downside

Dogecoin’s four-hour chart shows that the price is in a consolidative mode below the critical short-term 21-simple moving average (SMA) at $0.3623.

Despite the market turbulence experience this week, the DOGE price continued to trend within the two-week-old falling wedge formation.

The Relative Strength Index (RSI) points south towards the oversold territory while currently trading at 37.20.

Therefore, the DOGE bears could test the falling wedge support at $0.2602 if a fresh selling wave grips the broad crypto space.

The swing low of $0.1950 could be retested should the price yields a falling wedge breakdown.

DOGE/USD: Four-hour chart

However, a rebound from the wedge support could call for a test of the 21-SMA resistance, above which the 200-SMA at $0.4199 could be challenged.

The next bullish target aligns at $0.4304, where the 50-SMA and wedge resistance coincide.

A four-hourly candlestick closing above the latter would confirm a wedge breakout, with the descending 100-SMA at $0.4841 emerging as the immediate hurdle.