40% correction: Dogecoin (DOGE) analysis
The price of Dogecoin is currently caught in a hidden reversal pattern, which may cause the coin to revisit its previous lows.
Sometimes bearish market trends are reversed by investors. However, this time, investor behavior doesn't look too bright either.
Dogecoin will see some decline.
Dogecoin price is showing signs of increasing on the 8-hour chart, but when the extended candlesticks are taken into account, a bearish pattern is formed. Even worse, investors can't cancel it either.
This is because rising profits create profit taking among DOGE holders. A similar trend is seen in the market value to real value (MVRV) ratio.
The MVRV ratio measures the investor's profit/loss. Dogecoin's current 30-day MVRV stands at 9.2%, indicating gains, which could trigger selling. Historical data indicates that DOGE corrections occur in the 8% and 18% MVRV range, which we label the risk zone.
Therefore, as prices and profits increase, so does MVRV, and investors' ability to sell increases.
Read more: How to buy Dogecoin (DOGE) on eToro: Complete guide
This is further confirmed by the overall provision in profit. Sometimes, when the profitable supply reaches 95% of the total distribution of DOGE, a market high is formed, which is similar to a correction when the market freezes.
Given that the profitable supply is currently at 90%, it would not be surprising if the coming days see market highs. This will further increase the price drop.
DOGE price forecast: 40% correction
At the time of writing, the price of Dogecoin is trading at $0.206. Although recent findings may point to an impending rally, the longer-term timeframe suggests otherwise. MemCoin is currently stuck in a rising wedge.
This bearish reversal pattern is characterized by a combination of upward sloping trend lines. It indicates significant price movement, indicating weak momentum.
Based on this pattern, the Dogecoin price target is set at $0.127, which is close to a 40% correction.
Read more: Dogecoin (DOGE) vs Shiba Inu (SHIB): What's the difference?
However, if the pattern breaks through the upper trendline resistance or tests $0.22 as a support floor, the bullish theory may be rejected. Therefore, Dogecoin price will continue to rise to $0.24 and above.
Disclaimer
In accordance with Trust Project guidelines, this price analysis article is for informational purposes only and should not be construed as financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions. Please note that our terms and conditions, privacy policies and disclaimers have been updated.
