Dogecoin Faces Downside Risk as Daily Chart Confirms Bearish Trend

Dogecoin continued to fall in the most recent daily trading session, with a bearish indicator pointing to further short-term pain in the meme coin market.

This follows a warning from trader Tardigrade that a strong drop would be expected once the price passed below key Ichimoku levels, which tend to indicate that the market trend is weak as opposed to a mere correction. The fall is expected when the overall market sentiment is cautious.

Also Read: Dogecoin (DOGE) Defends Key Support as Macro Breakout Targets $1 to $4

Dogecoin Daily Chart Confirms Bearish Market Structure

On the daily chart, Dogecoin remains below the Ichimoku cloud, indicating that the overall trend is still led by sellers. The cloud in front is thick and red, indicating that there is strong resistance above, and it will be difficult for Dogecoin to rebound quickly.

As long as Dogecoin remains below this region, any attempt to move higher will likely encounter selling pressure. Price is definitely below the Kijun-sen, indicating a loss of balance and lack of momentum. The Tenkan-sen remains below the Kijun-sen, indicating a bearish market trend in the short term.

Source: X

Adding strength to the bearish side, the Chikou Span is below both price and the cloud, indicating a bearish Ichimoku pattern. Based on the above indicators, it can be said that the recent rallies are only temporary and not the beginning of a new trend.

Early Signals Hint at a Possible Momentum Shift

Although the market is bearish, there are a few initial technical indicators that are being noticed. The Tenkan-sen and Kijun-sen lines are moving closer to each other.

This is a sign that the selling pressure is slowing down. However, this does not necessarily mean that the trend is reversing. It could be the initial stages of turning around if the prices start to move in the right direction.

Currently, Dogecoin needs to move above the Kijun-sen and back into the cloud to turn around the daily trend. Until then, the probability of a decline is higher, and traders remain cautious about any rallies.

Long-Term Cycle Data Keeps Upside Expectations Alive

If one looks beyond the temporary weakness, the overall market trend in the long term is not the same. From history, Dogecoin has experienced a number of periods of building up, followed by large price movements upwards.

Source: X

In the earlier cycles, the price appreciation was by 190%, while in the latter cycles, it was by 480%. The consolidation zone is higher than the previous one, indicating a stronger demand.

The higher-low pattern indicates that the overall trend may still be intact despite the fluctuations. If the pattern continues, the next expansion may be as large as the previous ones, although the timing is still unclear.

Also Read: Dogecoin Stabilizes Near $0.12 Support as Accumulation Signals Hint at Potential Rebound