Could Dogecoin Be Due For A Drop? Here's What The Chart Says

Dogecoin DOGE/USD is the frontrunner in the cryptocurrency meme world and is one of Elon Musk's favorite cryptos.

Coinbase Global Inc. COIN recently listed Dogecoin for purchase or sale on their website. In celebration of putting the coin on their platform, they ran a sweepstakes. If any Coinbase user bought or sold $100 of Dogecoin, they were entered into a drawing to win $300,000 in Dogecoin.

Dogecoin was down 3.12% at $0.3155 at last check. Below is a look at the crypto's technicals.

See Also: How To Buy Dogecoin

Dogecoin Daily Chart Analysis:

• Dogecoin looks as though it may be forming into what technical traders call a head and shoulders pattern.
• The crypto is trading below the 50-day moving average (green), but above the 200-day moving average (blue). This indicates the stock is likely in a period of consolidation.
• The 50-day moving average may be a place where Dogecoin finds resistance, while the 200-day moving average could hold as support.

Key Levels To Watch:

• Dogecoin looks to be nearing the potential drop-off line.
• The head and shoulders pattern forms with three peaks and a baseline: two of the peaks are of similar height (shoulders), and the middle peak is higher (head). The pattern is considered a bearish reversal pattern, and the pattern can be confirmed when the price breaks below the baseline.
• In the case of Dogecoin, the baseline is near the 30-cent level as this is where the crypto has been able to find support before.

What’s Next?

Bullish technical traders would like to see Dogecoin move upwards and break away from the head and shoulders pattern. If the stock can start forming higher lows, the bulls can take control.

Bearish technical traders would like to see the head and shoulders pattern get confirmed. For this to happen the price would need to cross below the baseline and retest it as resistance. Following a retest as resistance, the price of Dogecoin could see a strong downwards move.