It was a rough morning for Dogecoin (CRYPTO: DOGE), as the crypto dropped about 32% between 8:15 a.m. and 8:45 a.m. on Wednesday before beginning to recoup some of the losses. By early afternoon, Dogecoin was trading down about 20% lower.
The fall was an exaggerated reaction to an overall long-term decline in not only Dogecoin but the general markets and cryptocurrency sector, which has seen the S&P 500 and apex crypto Bitcoin (CRYPTO: BTC) fall 14% and 37%, respectively, since March 29.
Dogecoin’s plunging price is a continuation of the downtrend the crypto confirmed on Monday, when Dogecoin broke down bearishly from a descending triangle pattern on the daily chart.
A downtrend occurs when a stock or crypto consistently makes a series of lower lows and lower highs on the chart.
The lower lows indicate the bears are in control, while the intermittent lower highs indicate consolidation periods.
Traders can use moving averages to help identify a downtrend, with descending lower timeframe moving averages (such as the eight-day or 21-day exponential moving averages) indicating the stock or crypto is in a steep shorter-term downtrend and descending longer-term moving averages (such as the …
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