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As a mini death cross starts to form on the daily chart, Dogecoin is displaying increasingly alarming technical signals that could abruptly end the recovery rally that propelled the asset higher throughout April and early May.
A death cross, which indicates waning momentum and a possible trend reversal, occurs when a shorter-term moving average drops below a longer-term moving average. The crossover between Dogecoin's shorter-term averages is still drawing attention because it occurs right after a failed breakout attempt, even though the long-term 200-day moving average is not part of the current setup.
Dogecoin losing positions
With DOGE's recent surge above $0.11, there was hope that the meme coin was finally gaining enough traction to take on higher resistance levels. But buyers soon lost control. The asset has since fallen back toward the $0.10 support area after failing to hold its position above the 50-day moving average.
There is a noticeable decline in the technical structure. Dogecoin is currently trading below the 20-day and 50-day moving averages, and the difference between them is getting smaller. The bearish case would be strengthened if the crossover is confirmed, and momentum-focused traders might apply more selling pressure.
Volume get thin
Fading enthusiasm is also suggested by volume trends. Buyers pushed volume noticeably higher during the rally phase as DOGE rose to local highs. However, participation has decreased since the reversal, suggesting that bulls are less inclined to support higher prices.
A similar picture is presented by the RSI. The indicator, which is currently trading close to 40, shows waning momentum without yet entering oversold territory. This allows for further declines before technical conditions are appealing enough to aggressive dip buyers.
The psychological $0.10 support zone is still the most crucial level. The recent weakness would be confirmed by a clear breakdown below that level, which would also probably hasten losses toward lower support levels established earlier this year.
However, the bearish crossover might turn into a false signal if buyers are able to recover the moving averages and move DOGE back above $0.103-$0.105.
Dogecoin is currently stuck between critical support and waning momentum. The possibility that the recent rally has already run out of steam before reaching a more significant breakout phase is greatly increased by the emerging mini death cross, but it does not guarantee a significant collapse.
Arman Shirinyan
Dan Burgin
