As a seasoned researcher with years of experience navigating the tumultuous seas of the cryptocurrency market, I’ve seen more than a few storms and calm waters alike. The recent downturn, with Dogecoin (DOGE) leading the charge, is reminiscent of a particularly treacherous squall we weathered not too long ago.
The value of cryptocurrencies dropped together with the US stock market due to worries about a harsh economic downturn triggered by soft economic data. As per recent analysis on Dogecoin, it was Dogecoin that led the decline among meme coins, falling significantly before finding support at $0.08.
Over the past week, the Federal Reserve opted not to adjust interest rates, but a smaller-than-anticipated job growth and shrinking manufacturing sector sparked concerns about an approaching economic downturn (recession).
The swap of assets between the Japanese and American bond markets made an already unstable condition worse, leading to a large-scale sell-off. Meanwhile, Dogecoin saw its weekly losses increase by 31%, resulting in a total decrease of 15% over the past month.
Soaring Exchange Inflows Keep DOGE Suppressed
In August, as market uncertainties heightened worldwide, investors chose to transfer their Dogecoin holdings to trading platforms, a move that further intensified selling activity. According to recent data from IntoTheBlock, over 188.2 million Dogecoins were deposited onto exchanges last month, contributing to the downward trend.
Typically, investors tend to shift their tokens to exchanges with the aim of selling them. Conversely, they transfer coins to personal custody for the purpose of holding onto them or staking them within the Decentralized Finance (DeFi) industry.
The volume of incoming transactions significantly impacts the fluctuations in cryptocurrency values. A rise in inflow volume this week might hinder Dogecoin’s recuperation pace, potentially causing its downward trend to continue towards the following crucial support level at $0.06.
According to the graph, approximately 58.3% of all Dogecoin (DOGE) currently circulating is experiencing losses, while a slightly smaller portion, around 39.8%, is yielding profits. Approximately 1.88% of the supply is at the break-even point.
There’s an increasing likelihood that the price might rebound from its current support at $0.08. But, for this to happen, buyers need to overcome significant resistance near the $1 mark, as there are approximately 73,000 wallets that have recently purchased around $8.27 billion worth of Dogecoin within the range between $0.0994 and $0.1021.
Dogecoin Price Analysis: Can DOGE Rally After Sell-Off?
For the first time since early July, the Relative Strength Index (RSI) has dropped into the oversold zone regarding Dogecoin’s price movement as it attempts to find support at $0.08 and potentially reverse above $0.1. However, a prior analysis of Dogecoin’s forecast suggests that its current position below the 20-day, 50-day, and 200-day Exponential Moving Averages (EMAs) may provide some resistance for the bulls. Consequently, investors should be cautious and ready for a potential price decrease to $0.06 if the support at $0.08 fails to hold.
According to an analysis of Dogecoin’s current pricing trends, it is likely that the token will continue to rise if it maintains its support at approximately $0.08. This week, traders are advised to take advantage of price dips by buying low, which could potentially boost Dogecoin’s value over $0.1.
Based on the formation of a falling wedge pattern (a chart pattern where price action contracts before potentially breaking out in one direction), it is expected that Dogecoin could experience a significant surge. After correcting and touching two consecutive lower highs, followed by three more such lows, the connecting lines form this pattern. If the price breaks above the upper trend line of this pattern, Dogecoin may be on track for a potential 78% increase in value.
As a seasoned trader with years of experience under my belt, I have come to appreciate the value of understanding technical analysis patterns to predict potential price movements. The wedge pattern I see forming in Dogecoin (DOGE) is particularly intriguing. By measuring the distance between the first swing low and the first swing high, then adding that measurement to the breakout point, we can identify key milestones such as $0.14 and $0.18. If DOGE manages to breach these levels, it could pave the way for even greater heights at $0.22. I’ve seen similar patterns play out in the past, so I’m keeping a close eye on this potential opportunity.
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2024-08-05 19:51