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Dogecoin (DOGE) has taken a significant downturn in the market, diving under the crucial 50-day simple moving average (DSMA). This downward movement could potentially be a precursor to a deeper decline, further eroding investor confidence.
The DOGE price has been steadily declining over the past few days, echoing Bitcoin’s recent performance. Bears have taken control below the pivotal $0.420 level, leading to a close below the $0.40 support and ultimately causing the coin to plummet 20% in value. The cryptocurrency has even broken through the crucial $0.280 support, with the lowest price recorded at $0.2630.
The daily chart reveals DOGE’s recent descent beneath the 50-DSMA, a trend that could potentially continue if bulls fail to regain control. The token is currently trading above the $0.300 level, having previously tested the 23.6% Fibonacci retracement level of the downward movement from $0.4845 to $0.2630.
If DOGE’s upward momentum can push through the $0.340 resistance level, it may struggle at $0.3750. This level coincides with both the 50-day simple moving average and the 50% Fibonacci retracement of the downward move from $0.4845 to $0.2630. If DOGE can successfully breach this ceiling, it could potentially accelerate further higher, targeting $0.4250 in the short-term and possibly even reach $0.450 if the trend persists.
Conversely, failure to surpass the $0.3750 resistance level may lead to a continuation of the downward trajectory, resulting in a test of the $0.30 support. The first significant support lies beneath at $0.2680, below which DOGE could potentially continue its descent to $0.250 or even plummet as low as $0.1780.
In conclusion, DOGE is still trading within the realm of losses above $0.30, necessitating a successful breach of the $0.340 and $0.3750 resistance levels in order to initiate a meaningful recovery. If not, it could once again test the $0.220 support, potentially leading to a deeper decline.
Source: coinchapter.com
