Just wanted to revisit our prediction from Dec 8th so that traders can continue to improve and understand how to read charts. When I made this post most people were still extremely bullish and expecting a bull flag to propel Dogecoin to the upside. We were in the same camp until we started to identify some warning signs for on the daily time frame. I am here to reexplain those concerns and to show why price has dropped the way it has. Here is that previous prediction:
First, we identified there could be a rising wedge forming (which is generally a bearish pattern) and usually sees a break to the downside.
The second main concern was our daily RSI. On our daily RSI strength was starting to fail at overbought conditions showing that buying pressure was slowing down. (red circle with message "very important to watch")
This signaled the third main concern. Although price was continuing to rise, strength was slowing which lead to a bearish divergence being created.
From our post we made around $0.45 giving this warning, price has already dropped 25% and our RSI has dropped 44%.
Now price is nearing completion of it's measured move dump. This does not mean price cannot drop further, but the technical measured move of the rising wedge target was between $0.32-$0.34. Therefore, if we start seeing buyers step in at this range we should see the dump completed and a new leg to the upside start.
Absolute worst case scenario at the current moment would be one final capitulation to $0.22-$0.23, but that is the less likely outcome.
First, we identified there could be a rising wedge forming (which is generally a bearish pattern) and usually sees a break to the downside.
The second main concern was our daily RSI. On our daily RSI strength was starting to fail at overbought conditions showing that buying pressure was slowing down. (red circle with message "very important to watch")
This signaled the third main concern. Although price was continuing to rise, strength was slowing which lead to a bearish divergence being created.
From our post we made around $0.45 giving this warning, price has already dropped 25% and our RSI has dropped 44%.
Now price is nearing completion of it's measured move dump. This does not mean price cannot drop further, but the technical measured move of the rising wedge target was between $0.32-$0.34. Therefore, if we start seeing buyers step in at this range we should see the dump completed and a new leg to the upside start.
Absolute worst case scenario at the current moment would be one final capitulation to $0.22-$0.23, but that is the less likely outcome.
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