- Dogecoin price has been on a downtrend for more than a week and could continue further.
- Market makers are likely to manipulate DOGE to collect liquidity below $0.065 before triggering a 20% ascent.
- A flip of the $0.065 support floor will invalidate the recovery rally.
Dogecoin price shows no signs of an uptrend as it has consolidated after a recent crash. This move is likely to dig a little deeper before buyers come out of the woodwork and potentially trigger another leg-up.
Dogecoin price sets a bear trap
Dogecoin price has clearly undone the gains it witnessed between August 3 and August 16 and is currently hovering around $0.069. In total, DOGE has crashed 25% and looks ready for a continuation of this trend.
The downtrend is necessary so market makers can punish the investors that purchased DOGE at $0.065 after creating a double bottom. A sweep of the liquidity resting below the aforementioned level will be the trigger that propels Dogecoin price higher. Ideally, a 20% upswing to $0.078 is something investors can expect. However, the sweep of the $0.065 level should be followed by a quick recovery above it to confirm the presence of bulls.
DOGE/USDT 1-day chart
On the other hand, if Dogecoin price produces a daily candlestick close below $0.065 and flips into a resistance level, it will denote a failure to recover and will also invalidate the bullish thesis. In such a case, DOGE could revisit the $0.057 support floor and collect the liquidity resting below this level before giving the uptrend another go. Unlike $0.065, this level is relatively stable and is likely to absorb the incoming selling pressure and allow for a reversal.