Since yesterday's FOMC meeting, the price charts of the entire cryptocurrency market have been deep in the red. Although the Federal Reserve did lower interest rates by 25 basis points as expected, after old Powell announced a stance against cryptocurrencies and stated that despite Trump's promises, the central bank does not allow the purchase of BTC, market sentiment changed, leading to a major sell-off in the cryptocurrency market.
Generally, altcoins are hit harder than BTC, but some altcoins suffer greater losses than others. Large meme coins are an example of this.
People's interest in Dogecoin is growing.
In the market sell-off, Dogecoin's price fell by over 12%. However, despite the price drop, whales and long-term holders have shown strong interest in this meme token.
DOGE spot inflow/outflow data shows that the outflow of DOGE from various exchanges in the cryptocurrency market has reached $150.03 million.
Outflow is an on-chain indicator that shows how much money DOGE whales and long-term holders have withdrawn from exchanges. These indicators suggest potential upward momentum and ideal buying opportunities.
In addition to the participation of long-term holders, traders are also very optimistic about this meme coin. Coinglass's Binance DOGEUSDT long/short ratio is 4.93, indicating a strong bullish sentiment among traders.
Currently, 83.15% of top traders on the Binance platform hold long positions, while 16.85% hold short positions.
DOGE faces a critical level.
Since the recent bull market began, Dogecoin has been one of the best-performing currencies; its price has risen nearly 200% in just one month. Now momentum has slowed, and with a surge in selling pressure, the asset is testing the 50 EMA support level, at a critical moment.
In technical analysis, the 50 EMA is a frequently monitored indicator, often seen as a key support level during upward trend corrections. This level is a turning point for DOGE's previous price movement, and whether the asset can continue to rise depends on its ability to stay above this level. Based on volume distribution, trading volume has significantly decreased during DOGE's recent decline.
This suggests that the selling pressure may not be as strong as it appears, and the current decline may be a normal adjustment rather than the beginning of a bearish reversal. To confirm a strong rebound and new bullish momentum, a significant spike in trading volume near the 50 EMA is needed. If DOGE can maintain its position above $0.35, it may rebound to $0.40 or even higher. However, the next critical level to watch will be around $0.28, and if the 50 EMA fails to provide the necessary support, it will correspond to the earlier price consolidation area.
Currently, the short-term outlook for Dogecoin may depend on its ability to stay above the 50 EMA. To determine whether Dogecoin is undergoing a deeper correction or will rebound, investors should closely monitor any significant changes in trading volume and market sentiment.
Technical Analysis
From an investment perspective, Dogecoin may currently perform very poorly, but a popular indicator actually suggests that the main meme cryptocurrency on the market is oversold.
The Bollinger Bands represent the 20-day moving average and its two-way deviation. Logically, prices should fluctuate within this range. When prices exceed this range, it may indicate that the asset is oversold or overbought.
For DOGE, the situation is exactly the first one; across all time frames, especially on a daily basis, the price of the meme cryptocurrency has exceeded the lower limit, now around $0.318 per DOGE, which is 3.5% higher than the current Dogecoin quote.
Does this mean that Dogecoin's price will rise now? Unlikely. However, if the price trend statistics are credible, it is possible for Dogecoin to return to the Bollinger Bands range. But when it will return remains an open question.
