A Dogecoin sell signal has appeared on the weekly price chart. According to an analyst, here are the targets the coin could potentially dip to.
As explained by analyst Ali in a new post on X, TD Sequential has flagged a sell signal for DOGE. The “Tom Demark (TD) Sequential” here refers to an indicator in technical analysis that’s popularly used for finding points of probable tops and bottoms in any asset’s price.
There are two phases involved in this metric. During the first, candles of the same polarity are counted up to nine, and at the end of these nine candles is a potential reversal point for the asset. This phase is called the “setup.”
If the candles leading to the setup’s completion were green, then the TD Sequential would give a sell signal for the chart. On the other hand, if they were red, the signal would be a buy one.
The other phase is the “countdown,” which kicks off as soon as the setup is complete. This phase is thirteen candles long; at the end of these thirteen, another probable top or bottom occurs for the price.
Dogecoin has seen its weekly price complete a TD Sequential setup recently. Below is the chart shared by the analyst that highlights this pattern in the memecoin.
Looks like the asset has recently seen nine green candles | Source: @ali_charts on X
As is visible in the graph, the TD Sequential has completed the setup phase on the weekly chart of Dogecoin with green candles recently. This could indicate that the coin may reverse towards a downtrend from here on out.
“This comes as DOGE faces a key resistance level that has repeatedly thwarted its climbs in the past,” explains Ali. “A correction could see prices dip to $0.085 or even $0.078.”
The former target would mean a decrease of about 11% from the current cryptocurrency price, while the latter would suggest a drawdown of more than 18%.
Not all hope may be lost for Dogecoin, though, as the analyst notes, “if DOGE can surge past $0.11, the bearish scenario gets negated.” A few days ago, Ali also shared this chart that showed the on-chain support and resistance map of the memecoin:
The cost basis distribution of the asset | Source: @ali_charts on X
In on-chain analysis, support and resistance are defined based on the concentration of investors who bought at a particular level. Price ranges hosting the cost basis of many addresses provide strong support/resistance when the asset’s spot price retests them.
The chart shows that the $0.094 to $0.097 range is the strongest support zone for the asset out of all the listed ranges. Dogecoin has declined into this zone recently, so it’s a test of whether on-chain support can hold against the technical sell signal that has recently formed.
At the time of writing, Dogecoin is trading at around $0.096, up 7% in the past week.
The price of the asset appears to have seen a dip over the past couple of days | Source: DOGEUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Santiment.net
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