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Analyzing MOODENG’s ‘double top’ pattern: Should you expect a dip to $0.134?
MOODENG has formed a double-top pattern on its one-day chart after plummeting by 35% in the last seven days, leading many analysts to speculate that it may drop further towards $0.134.
The cryptocurrency, which is based on the Solana blockchain, has been trading at $0.256 as of press time, following a significant decline over the past week.
This latest price action mirrors the broader market’s drawdown, with Coinglass reporting more than $1.5 billion in liquidations across two days, all due to the Federal Reserve officials’ hawkish stance during their recent FOMC meeting.
In this analysis, we will be examining the implications of MOODENG’s double-top pattern on its potential future price action and provide insights into whether it is wise for investors to expect a dip towards $0.134.
Double-top pattern signals further declines
According to technical indicators, MOODENG has formed a bearish reversal signal in the form of a double-top pattern, which could lead to further dips in the cryptocurrency’s value.
As seen on its one-day chart, the cryptocurrency breached crucial support at $0.341 and subsequently formed a sell signal, propelling prices downward. The presence of this pattern serves as an indication that sellers are gaining control, paving the way for more declines.
In this case, if buyers fail to intervene, MOODENG could potentially drop all the way down to $0.134, creating significant selling opportunities for traders who anticipate such a price movement.
ADX signals weakening bearish trends
Despite the prevalent bearish trend in the market, the Average Directional Index (ADX) has started to tip southward, suggesting that these trends may be losing momentum. This shift could result in reduced volatility and potentially cause prices to stabilize within a specific range.
On-chain metrics provide mixed signals
In addition to the double-top pattern and ADX signals, other on-chain metrics are providing mixed insights regarding MOODENG’s potential price action.
For instance, the cryptocurrency’s Open Interest has seen a significant decline from $94 million to $0.1 million over the past week. This sudden drop in short positions may suggest that traders have closed their positions and exited the market, further reinforcing the idea that the bearish trend is weakening.
Short sellers dominate the market
It’s also worth noting that the Long/Short Ratio for MOODENG has dropped to 0.89, indicating a strong bearish sentiment among traders. This could be an indication of increased selling pressure as more investors anticipate further declines in the cryptocurrency’s value.
In conclusion, while it is not impossible for MOODENG to drop all the way down to $0.134, this scenario seems increasingly less likely given the weakening momentum and potential loss of control by bearish traders.
Traders who are looking to capitalize on these market dynamics may want to take a closer look at the cryptocurrency’s price action in the coming days to determine whether it is wise to buy into its value or wait for further confirmation before making any investment decisions.
Source: ambcrypto.com
