The price of Dogecoin is down about 5% in the last day after the general market crash. The meme coin that had seen improved sentiment did a quick 180 and started bleeding. While Dogecoin price could only follow Bitcoin’s decline, are there other factors driving the decline?
Why is the price of Dogecoin falling?
One reason the price of Dogecoin is low today is because of its proximity to Shiba Inu. The latter saw a high expected launch of Shibarium failed on Wednesday, triggering rapid drops among the meme coins in its ecosystem.
As a result of this unfortunate event, SHIB’s price fell by almost 10% within hours and this seemed to have spilled over to Dogecoin. Dogecoin, a meme coin and the biggest competitor to Shiba Inu, was expected to rally if SHIB was up as a result of the Shibarium launch. Competition is also expected between Dogechain and Shibarium, further fueling this correlation.
The problem with such correlations is that they tend to follow both the negative and the positive path. Given this, when the price of Shiba Inu started falling, Dogecoin followed suit with the expectation that both assets would move in the same direction.
DOGE price falls alongside SHIB in volatile market conditions | Source: DOGEUSD on Tradingview.com
Furthermore, as one of the top 10 largest cryptocurrencies in the space, DOGE often tracks Bitcoin’s performance quite closely. So when Bitcoin reversed behind the back of the FOMC meeting, Dogecoin was hit by a double-decker bus, sending it deep into the red zone.
Can DOGE recover the price from here?
According to crypto analyst “Tony The Bull”, it’s not all bad news for Dogecoin. In a recent analysis, he points out that DOGE tagged the 1-month parabolic SAR. This is remarkable as the last time the meme coin reached this level was in 2021.
DOGE tags 1M Parabolic SAR | Source: Tony The Bull on X
As a result, DOGE’s price went from $0.0018 to more than $0.7. At the time, this translated into an increase of more than 24,000%. So it stands to reason that if the altcoin re-tags this 1M parabolic SAR, a rally could happen in the near future.
However, DOGE’s price is unlikely to actually rise above $50 at this level. This is because the crypto market is still in peak bear season, while 2021 was peak bull season. Nevertheless, a rally towards $0.09 is not ruled out.
