Dogecoin price continued to tumble in line with the broader crypto market.
Dogecoin (DOGE), the biggest meme coin, plunged to $0.2180, down by 25% from its highest point in July. Its market capitalization has dropped to over $32 billion.
The daily timeframe chart shows that the much-anticipated surge to $1 may not happen soon, as DOGE has formed bearish chart patterns.
It is in the process of forming a rising wedge pattern. This pattern comprises two ascending, converging trendlines. In this case, the upper line connects the highest swings since March 3, while the lower line links the lower lows since June 23.
A bearish breakout happens when the two lines approach their confluence, which may happen soon.
The forming rising wedge is part of the right shoulder of the head-and-shoulders pattern that has been forming since October 2023. Its head section is at $0.4825, while the left shoulder is at $0.2275.
The right shoulder is at $0.2865, while the neckline connects the lowest swings since October 2023.
These two patterns and the performance of top oscillators like the MACD and the Relative Strength Index point to further downside. The MACD indicator is about to cross the zero line, pointing downward, while the RSI has dropped below 50.
The most likely scenario is where the Dogecoin price will drop and retest the support at $0.1415, its lowest level in June.
DOGE price chart | Source: crypto.news
While the Dogecoin price forecast is bearish, two key catalysts may invalidate this and push it to $1. The most important one is if a crypto market rally happens. If Bitcoin (BTC) rebounds from the ongoing slump and keeps rising, there is a possibility that other altcoins will follow.
The other important catalyst will be the approval of spot DOGE ETFs by the Securities and Exchange Commission later this year. Bitwise, Grayscale, and 21Shares have all filed for these funds, and there are rising odds that the agency will approve them because DOGE is a proof-of-work coin like Bitcoin and is highly liquid, with billions of dollars in trading volume.
A DOGE ETF approval would be bullish as it would lead to more inflows from American investors such as those who have invested in BTC and Ethereum funds.
