Dogecoin positioned for steep correction towards $0.18

Dogecoin price fails to hold critical support.
Bears could easily tip the scale to initiate a flash-crash.
Oscillator levels hint that downside pressure could be limited.

Dogecoin price is now in the most bearish Ichimoku position since May 2021. Additionally, bears remain in control and look for opportunities to push Dogecoin lower to the $0.18 value area – the final support before total capitulation would occur.

Dogecoin price to test $0.18, successful bears could generate a flash-crash to $0.08

Dogecoin price is extremely bearish with the Ichimoku Kinko Hyo system. All criteria for an Ideal Bearish Ichimoku Breakout entry are fulfilled. Additionally, Dogecoin is trading on top of the final sliver of support within the 2021 Volume Profile. There is no Ichimoku support for Dogecoin between $0.21 and $0.18.

To prevent a likely flash-crash, buyers must support Dogecoin price at the $0.18 value area. The large, red shaded area on the chart represents the price levels from $0.18 to $0.08. Between those two price levels, the 2021 Volume Profile is almost non-existent. This means that if Dogecoin were to drop below $0.18, it would likely get sucked, like a vacuum, lower to the next high volume node at $0.08.

However, Dogecoin has a history of creating extremely bearish positioning and then whipsawing bears into a massive trap. So while the Relative Strength Index and the Composite Index both show that some downside pressure could continue, the Optex Bands oscillator is the critical tool to watch. The Optex Bands are currently trading just a hair above the extreme oversold levels – indicating a bounce could occur at any moment.

DOGE/USDT Daily Ichimoku Chart

For bulls to invalidate any near-term or future bearish forecasts, they will need to close Dogecoin price above the Ichimoku Cloud. Ideally, buyers would need to close Dogecoin at or above the $0.28 level. If that occurs, Dogecoin will enter an Ideal Bullish Ichimoku Breakout entry, with a likely target in the $0.50 value area.

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