Dogecoin (DOGE) Loses 40% From Top: What’s Next?

by

As a seasoned crypto investor with battle-scars from the 2017 bull run and the subsequent bear market, I’ve learned to expect the unexpected in this rollercoaster ride we call cryptocurrency investing. The recent plunge of Dogecoin from its peak of around $0.50 to its current trading price of $0.29 is a stark reminder that even the most meme-worthy coins can experience sharp corrections.

Dogecoin, which reached approximately $0.50 at a recent peak, has experienced a steep drop of about 40%. As the asset attempts to maintain the momentum gained during the bull run, this significant decrease suggests intense selling activity. With Dogecoin currently trading near $0.29, questions are being posed about its future trajectory and key levels worth monitoring closely.

The price of Dogecoin has dropped below a previously strong level of support, currently sitting at around $0.35 on the chart. This suggests that the market is now dominated by sellers, indicating a shift in sentiment. If the price continues to fall, the next potential support point would be around $0.28, where another moving average line intersects. If this level isn’t held, Dogecoin could potentially drop further to its next significant support at approximately $0.21, which is marked by another moving average line.

Currently, the price level of $0.35 acts as a notable obstacle on the upward trend, making it hard for DOGE to maintain its bullish energy. For DOGE to overcome this hurdle and transform it into a supportive level again, it needs to surpass this point. If it does, the next significant resistance would be at $0.38. The trading activity indicates that traders are actively liquidating their positions due to an uptick in selling pressure, as suggested by the volume profile.

Despite being quite close to oversold territory (RSI at 31), there could potentially be a brief period of consolidation or rally. However, this would only occur if buyers step in to defend the $0.8 support level. This possibility is contingent upon buyer intervention. In the long run, Dogecoin‘s trajectory will likely be heavily impacted by overall sentiment within the broader cryptocurrency market. Currently, Dogecoin struggles to rebound from its significant drops, but an improvement in market conditions may aid in stabilizing the cryptocurrency.

On the flip side, further weakness in the market could lead Dogecoin to experience a more intense downturn. Moreover, the recent decline of Dogecoin underscores the volatile nature of the cryptocurrency market. To anticipate its next action, traders are advised to closely monitor the $0.28 support and $0.35 resistance points. At present, Dogecoin is carefully maneuvering through this challenging period.

Read More

2024-12-20 17:57