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Dogecoin ZKP Upgrade Faces Uncertainty as Bearish Chart Signals Hint at 77% Crash Risk
The proposed zero-knowledge proof (ZKP) integration for Dogecoin’s core upgrade has sparked a mixed reaction from the community, with some expressing excitement about the potential for enhanced scalability and privacy. However, technical charts are painting a different picture, suggesting a sharp reversal in price momentum.
As reported earlier, MyDoge wallet’s team has proposed an upgrade to Dogecoin Core that would allow for off-chain zero-knowledge proof verification. This change is aimed at enabling zk-rollups, ultimately leading to faster transaction times and reduced costs.
While the community remains optimistic about the potential benefits of this integration, a closer look at recent price action reveals a concerning trend. A bearish flag pattern has emerged on Dogecoin’s daily chart, indicating a high risk of an extended decline.
Dogecoin’s price chart shows a well-defined rising channel, which initially seemed to be a sign of further upside momentum. However, the latest price action suggests otherwise. The token is currently trading at $0.23488, and this bearish flag pattern implies a potential 77% crash risk if not rejected by strong support.
A breakdown below the previous low would confirm this scenario, potentially targeting a level near $0.05296.
Furthermore, a closer examination of Dogecoin’s Relative Strength Index (RSI) reveals an unwelcome sign: weakening momentum. The RSI, which measures price changes, has reversed sharply from the overbought region, indicating that investors are no longer enthusiastic about the asset.
In fact, this failure to break above the 70 threshold can be viewed as a sign of waning momentum and increased selling pressure. This development aligns with the bearish flag pattern and reinforces concerns about an imminent downturn.
Lastly, the Moving Average Convergence Divergence (MACD) indicator is also flashing warning signs. The MACD line has flattened, indicating a lack of momentum in recent price action. This flattening trend may signal the start of a new decline, as the distance between the two lines diminishes.
Source: coinchapter.com
