The meme-driven cryptocurrency Dogecoin (DOGE) has recently encountered rough seas. Following a stellar 2021, DOGE has been engulfed in the broader correction in the cryptocurrency market, and its near-term future may depend on a critical technical level: the 50% Fibonacci retracement. In technical analysis, one commonly utilized indicator is the Fibonacci retracement tool. It uses past price movements to determine possible support and resistance levels. In particular, the 50% retracement level indicates a possible price point at which a price can find buyers and recover from a loss.
The 50% retracement in DOGE’s case is located at $0.14. The coin may see less decline if the price stays above this mark, indicating that there are still buyers interested in it. On the other hand, a collapse below $0.14 can indicate that the decline is still ongoing, with targets as low as $0.123.
Dogecoin’s Current Issues
The latest downturn in DOGE corresponds with a more general decline in the cryptocurrency market. A chain reaction caused by Bitcoin’s March decline below $65,000 sent most altcoins, including DOGE, down.
The dearth of noteworthy good news or advancements makes DOGE’s problems worse. Although there have been discussions on Dogecoin’s possible use as a payment method, actual acceptance is still quite low. In contrast to coins with proven use cases, DOGE may be more vulnerable to market swings because of its lack of fundamentals.
What’s at Stake Below $0.14
A loss of the critical $0.14 support level for DOGE could trigger additional price declines. Below is a summary of what to anticipate:
- Selling Pressure: Traders who sense a deteriorating trend will likely sell off in response to a breakdown. This hastened the price drop.
- Lower Support Levels: $0.106 and $0.123 are possible support levels, but a decline to these levels would be a significant setback for DOGE bulls.
- Technical Indicators Becoming Bearish: The downward trend may be strengthened if additional technical indicators, such as the Exponential Moving Average (EMA), become bearish.
Is DOGE capable of restoration?
For DOGE bulls, all is not lost. What might cause a reversal is as follows:
- Positive Market Sentiment: DOGE may benefit from a wider rebound in the cryptocurrency market, especially if Bitcoin’s price rises.
- Increased Utility: DOGE may attract more customers and see a price increase if it can be used more widely as a payment method or for other purposes.
- Support from the Community: The Dogecoin community is still fervently committed to the coin. It might offer some price stability if they stick to and even purchase more DOGE during a downturn.
The upcoming weeks will be critical for DOGE. It Is vital to stay above $0.14 to prevent an even more drastic decline. Even while the price increases, factors other than technical analysis are necessary for long-term success. A positive change in the sentiment of the cryptocurrency market as a whole and enhanced utility are essential for a long-lasting rebound in DOGE.
