Dogecoin price stuck in pennant while DOGE bears take upper hand
|- Dogecoin price action is stuck in a wide-ranging pennant that is well-respected on both the downside and upside.
- DOGE price is starting to converge toward the bearish side as price action slips below $0.26.
- A break of the green ascending trend line, and thus a break out of the pennant, could open DOGE to a 30% loss.
Dogecoin (DOGE) price action is starting to fall in favor of the bears after bulls got rejected on any further gains on October 6 at $0.29. As the pennant begins to consolidate, some bearish signs start to form and spell grim perspectives for the bulls. A break of the green ascending trend line could open up losses toward $0.19.
Dogecoin price is under bearish pressure to break the pennant to the downside
Dogecoin price action has been in a bull run with a peak on October 6, where bulls failed to break above $0.29 and the monthly R1. That rejection saw quite a lot of profit-taking in long positions and made price action in DOGE fade to the downside. Although technically still in a short-term uptrend, the longer-term downtrend looks to become a reality again for the bulls.
DOGE price rejection of $0.29, where bulls got a very abrupt stop to the upside on October 7, made bears stream in to start taking out bulls in Dogecoin price action. The level around $0.26 not only held historical importance, but with both the 55-day and 200-day Simple Moving Averages (SMAs) working as resistance, bulls faced a threesome of refusals on their attempt to retest $0.29. To make matters even worse, the 55-day broke below the 200-day SMA and could be the start of a Death Cross, which bears love to use as a reason to go short Dogecoin.
DOGE/USD daily chart
With bears clearly in control in Dogecoin price action, expect a retest of the green ascending trend line in the coming days. A break below would first meet support at $0.19, going back to September 21, with a double floor and the S1 support level from September. A leg lower would make bears target $0.16, with the low from July 20 and the S1 support level as profit-taking points .
In case bulls can take the upper hand in DOGE price with the help of some favorable tailwinds, expect a break back above $0.26, followed by a retest of support on that same level before bulls then charge in full force to break the red descending trend line and target $0.29 for the retest of a double-top formation.
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