Dogecoin (DOGE) at Risk: Factors Leading to a Potential Correction

Dogecoin (DOGE) price is witnessing increasingly bearish behavior from investors combined with pessimistic market cues.

Furthermore, the meme coin is stuck in a bearish pattern and will likely witness a significant decline if validated.

Dogecoin Investors’ Bullishness Fading?

Dogecoin’s price is primed for a decline, and with the lack of support from DOGE holders, this correction could arrive quicker than expected. Whale addresses are noting a pullback as they are offloading their investments.

The addresses holding between 10 million and 100 million DOGE have sold off more than 300 million DOGE worth nearly $55 million since the beginning of the month. Their increasing pessimism could cause considerable losses to retail investors.

Dogecoin Whale Holdings. Source: Santiment

Speaking of whom, their behavior is not very bullish either. This is because about 6% of the entire circulating supply has moved into their wallets, bringing their total holdings to 13% in the last ten days.

Read More: How To Buy Dogecoin (DOGE) and Everything You Need To Know

These short-term holders tend to only hold their supply for a period of one to three months. Consequently, the DOGE sitting in their wallets becomes vulnerable to potential sell-offs, which would, in turn, cause a decline in Dogecoin’s price.

Dogecoin Supply Distribution. Source: IntoTheBlock

DOGE Price Prediction: Expect a Drawdown

Dogecoin’s price is highly bearish at the moment, considering the aforementioned factors as well as broader market cues. To make it worse for DOGE holders, the meme coin is currently stuck in a rising wedge.

A rising wedge is a bearish chart pattern characterized by converging trendlines sloping upwards, indicating a potential reversal. Breakdown below the lower trendline acts as a signal for further downward movement.

Thus, based on the pattern, Dogecoin’s price could be noted to have a drawdown of 42% to $0.105 if it breaks down at the current trading price of $0.185. However, if this rising wedge remains unbroken at the moment, eventual recovery and correction will result in a breakdown from $0.20.

DOGE/USDT 1-day chart. Source: TradingView

This would send DOGE down by 38% to $0.127.

Read More: How to Buy Dogecoin (DOGE) Anonymously: A Step-by-Step Guide

However, if the gradual uptick continues and $0.220 is cemented as a support floor, the bearish thesis would be invalidated, resulting in further growth.

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