Why is Dogecoin price down today?

cyptouser5 months agoCryptocurrencies News134

Dogecoin price is down today as the effect of Elon Musk's DOGE rally fades away and the price of Bitcoin slips below $30,000.

Why is Dogecoin price down today?

The price of Dogecoin  is down today, mirroring the trend elsewhere in the cryptocurrency market.

Elon Musk triggers DOGE profit-taking

On July 18, DOGE price fell 1.75% to $0.068, slightly underperforming the rest of the crypto market that dropped 1% in the same period.

DOGE/USD daily price chart. Source: TradingView

Dogecoin's price decline came as a part of a broader correction from its local high of $0.075, established after Ripple's partial win over the U.S. Securities and Exchange Commission (SEC) three days ago.

The day before, DOGE saw a modest, albeit short-lived gains due to Elon Musk. Dogecoin price climbed 5.3% to $0.073 after the billionaire appears to have referenced the meme-cryptocurrency.

Therefore, the July 18 pullback could be the result of traders securing short-term profits enabled by Musk.

Furthermore, the downside move trapped enthusiastic bulls across crypto derivatives exchanges, leading to long liquidations worth $1.50 million in the past 24 hours, which likely intensified the selloff.

DOGE total liquidation chart. Source: Coinglass

DOGE price outlook in July

From a technical standpoint, DOGE's correction started after testing a resistance confluence comprising of its 200-day exponential moving average (200-day EMA; the blue wave in the chart below) and a multi-month descending trendline (black).

DOGE/USD daily price chart. Source: TradingView

As of July 18, DOGE/USD held above the resistance-turned-support of 50-day EMA (the red wave) near $0.068. Failing to hold it longer could mean an extended decline toward $0.066 in July, a support confluence comprising a horizontal line (purple) and an ascending trendline (black).

Conversely, a bounce from the 50-day EMA could have DOGE price test the resistance confluence near $0.075 as their July upside target.

Dogecoin price long-term outlook

Dogecoin has meanwhile painted what appears to be a "BARR Bottom" pattern on its daily chart.

BARR stands for Bump-and-Run-Reversal, a technical setup that traditional analysts perceive as a bullish reversal pattern when formed during a bear market. As of July 18, DOGE price appears to be in the pattern's breakout stage, as illustrated below.

DOGE/USD daily price chart. Source: TradingView

If the pattern is confirmed by further gains, DOGE price can grow by as much as the BARR Bottom pattern's maximum height. In other words, a bullish target o $0.088 by September 2023, up 30% from current price levels.

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