Dogecoin has lost 10% in seven days after losing another 2% in the last 24 hours. Still, chart analysis indicates potential for further downside.
A four-month bullish trend that saw DOGE hit a 3-year high of $0.46 in December 2024 has faded and given way to a bearish outlook that seeks to crash the top meme coin’s price below $0.30.
Early morning trading on Wednesday, Jan. 29, confirmed the bearish bias towards DOGE when its intraday trading price tested the critical $0.31 support level. The dispiriting start of the day was the culmination of a week-long downtrend that saw Dogecoin’s price slip by more than 10%, according to data from CoinMarketCap.
The Moving Average Convergence Divergence (MACD) histogram that has been printing deep bars below zero throughout the week confirms the bearish trend for DOGE. The RSI indicator has also remained well below 50, indicating stronger momentum towards a down-trending price action.
Should the bulls fail to defend the critical $0.31 support level, forecasters expect Dogecoin’s price to dip by a further 16% to find new support around $0.26, representing a 20-cent drop from the December highs.
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To allay the fears of a bearish momentum, DOGE would have to race back above the $0.40 price level. A break above this resistance level would rekindle the bullish sentiment and set the mem coin up for a significant upward price action.
Whales accumulate 490 million DOGE on the dip
Amidst the pullback, whales have been actively accumulating the popular meme coin.
Compelling data shared by a top crypto analyst, Ali Martinez, shows that these large holders have bought more than 460 million DOGE over the last few days.
Historically, such buying pressure signals an underlying strength in crypto assets and a conviction it is poised for an upward trend.
