This week, the cryptocurrency market has seen significant volatility, with the prices of Dogecoin (DOGE) and Pepe (PEPE) dropping over 10%. On Thursday, both memecoins are retesting key support levels, which may present potential buying opportunities for investors looking to buy on dips. However, caution is warranted as the momentum indicators for both tokens show signs of weakening.
Dogecoin (DOGE): Important support area at $0.35
Dogecoin reached a yearly high of $0.48 on December 8, but has since dropped 23%, testing important support levels around $0.35. This level coincides with the 50-day exponential moving average (EMA) and represents the 61.8% Fibonacci retracement of the previous bullish move from $0.14 to $0.48.
Support level analysis:
The $0.35 level is crucial for DOGE. If sustained, the price may recover to $0.41, corresponding to a 13.5% increase from the current level.
If DOGE cannot establish support at $0.35 and closes below $0.34, the price could drop further to $0.31, a 7% decline from the current level.
For external investors, $0.35 may present an opportunity to enter the market, especially if a recovery is observed at this important support level.
Pepe (PEPE): Testing important retracement level at $0.000018
Pepe reached a new all-time high (ATH) of $0.000028 on December 9, but quickly saw a 26.6% pullback in the following days. As of Thursday, PEPE is testing the 50% retracement from the low on November 4 of $0.000007 to the ATH of $0.000028, at $0.000018. This retracement closely aligns with the daily support level of $0.000017, making it an important area for a potential reversal.
Support level analysis:
If PEPE can maintain support at $0.000018, the price is likely to see a significant recovery, potentially rising 28% to $0.000024, a level last seen on Monday.
However, if PEPE fails to hold the support at $0.000018 and closes below $0.000017, the price could drop 6.8% to test the weekly support level at $0.000016.
For investors looking to buy memecoins themed around frogs, $0.000018 is an important area to watch. A successful recovery from this level could lead to a strong rebound.
Conclusion: Proceed with caution
Both DOGE and PEPE are currently at important support levels. While these memecoins may offer buying opportunities for investors looking to capitalize on potential recovery, traders should exercise caution. The weakness of momentum indicators suggests that further declines may occur if support levels are not maintained. Investors should closely monitor price action and consider setting stop-loss orders to manage risk.
As both DOGE and PEPE are testing important price levels, the upcoming days will be critical in determining whether these memecoins can maintain recent upward momentum or will continue to decline.
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