Dogecoin Price in Bear Market: How Low Can DOGE Drop?

After the Federal Reserve made a tough policy decision, the cryptocurrency industry faced intensified selling waves, leading to a sharp decline in Dogecoin's price.

Dogecoin (DOGE) has fallen for five consecutive days, reaching its lowest level since November 11, plummeting nearly 45% from its monthly high, entering a deep bear market.

The collapse of Dogecoin is related to the increasing panic in the cryptocurrency industry, causing investors to panic sell. Cryptocurrencies remain highly unstable, as most participants are short-term retail investors.

The decline of DOGE indicates that the token has entered the markdown phase of the Wyckoff method after several weeks of distribution. Wyckoff's framework identifies four phases that an asset undergoes: accumulation, markup, distribution, and markdown.

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For Dogecoin, the accumulation phase occurred between April and November, with limited price fluctuations. It then entered the markup phase, where demand exceeded supply, leading to a parabolic rise. In the distribution phase, as savvy investors exited, the price began to stabilize. Now, the price is falling, with supply exceeding demand, leading to panic selling.

The decline in Dogecoin is also influenced by doubts about Elon Musk's government efficiency plan. Musk and Vivek Ramaswamy plan to cut government spending by over $2 trillion through measures such as mass layoffs. However, analysts believe that this change is feasible in the private sector but faces significant regulatory and political resistance in government.

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