crypto.news
Dogecoin’s price is stuck in a bear market after plunging by over 36% from its year-to-date high, and two emerging patterns point to a strong breakdown as demand wanes.
- Dogecoin price could be on the verge of a strong bearish breakout.
- The coin has formed a bearish pennant pattern on the daily chart.
- It is also about to form the risky death cross pattern on the daily timeframe.
Dogecoin price forms two risky patterns
The daily chart shows that the Dogecoin ($DOGE) price has been in a downtrend this month. This crash may continue as a death cross pattern nears, with the spread between the 50-day and 200-day Weighted Moving Averages narrowing.
The last time that the $DOGE price formed this risky pattern was in February this year, and the coin dropped by 50% after that.
The Dogecoin price is also forming a bearish pennant pattern, characterized by a vertical line and a symmetrical triangle. The two lines of this triangle are now nearing their confluence levels, where bearish breakouts usually happen.
$DOGE’s price remains below the Supertrend indicator, indicating that bears are in control. Therefore, the most likely scenario is a strong bearish breakout, potentially to this month’s low of $0.1493, which is ~25% below the current level.
$DOGE demand is waning
One potential reason why the Dogecoin price may crash soon is that the demand is waning. A good example of this is in the futures market where the futures open interest has tumbled.
Data compiled by CoinGlass shows that its futures open interest has crashed below $2 billion since October 10 this year. Before that, the interest was consistently above $4 billion, as demand remained elevated.
The same trend has happened in the spot market, where the daily volume tumbled to $2.7 billion on Oct. 26, down from this month’s high of $20.45 billion.
Meanwhile, the recently launched REX-Osprey $DOGE ETF has lost traction, with no inflows over the past few days. Its assets under management have remained at $32 million in the past few weeks.
In contrast, the REX-Osprey XRP ETF has already crossed the $100 million milestone. The two funds were launched on the same day.
There are concerns that the Dogecoin price lacks a clear catalyst beyond the potential approval of additional ETFs by the SEC.