The crypto market is seeing red across the board, with Dogecoin (DOGE) taking a notable hit after a strong run. The meme crypto has shed about 22% of its value in just 24 hours, while its weekly losses have mounted to over 27%.
DOGE isn’t alone in this downward spiral. Bitcoin has retreated from its most recent highs substantially, which has been evident in the broader crypto market. The shifts in the market show how quickly crypto values may change.
Moreover, the timing of this correction follows one of the strongest rallies in the crypto market where most assets posted substantial gains. The pullback has shifted market sentiment, though experienced traders often view such moves as part of normal market cycles.
Dogecoin’s Price Trends: A Transition from Rally to Correction
Dogecoin displayed bullish momentum in early November, surging up to around $0.503 in mid-December. However, after encountering resistance, the memecoin has entered a bearish phase. Currently trading at $0.284, the price reflects a steep decline, underscoring the broader shift in market sentiment.
DOGE price chart, Source: TradingView
Key resistance levels for Dogecoin include $0.36652, aligning with Fibonacci retracement levels, and $0.48431, marking the rally’s peak. On the downside, $0.26921 is an immediate support zone. If breached, the price could extend its losses towards $0.18649 and potentially revisit the August low of $0.08100.
Indicators Suggest Bearish Momentum
Technical indicators further emphasize the current bearish sentiment. Bollinger Bands show the price breaking below the lower band, signaling strong selling pressure.
The RSI has dropped to 30.25, pointing to oversold conditions. While this could suggest a potential short-term recovery, oversold readings in a downtrend often persist.
Fibonacci retracement levels highlight crucial zones for potential reversals. The 0.618 level at $0.26921 serves as a critical test for buyers, while the 0.786 level at $0.18649 could act as a subsequent support. Trading volumes have surged during the decline, reinforcing the ongoing bearish momentum.
Read also: Monero (XMR) Price Approaching Resistance: Is a Major Move Coming?
Where’s DOGE Price Headed?
The asset is making lower highs and lows, and the short-term trend is still bearish.
Due to persistent selling interest, the medium-term prognosis shows a change in attitude to bearish. For any recovery, Dogecoin must hold above $0.26921 and break resistance at $0.36652. Failure to stabilize at current levels could lead to further declines.
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