Dogecoin has finally reached a very precarious moment. The former darling of the meme token world turned into one bearish trendwith recent graphs showing a worrying decline.
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Analysts noted that DOGE has fallen below a key resistance area that previously acted as a crucial support level, a sign that more losses are in store. Investors are now concerned that if the economy fails to find stability, interest rates could fall another 38% to 40%. Other key support levels are at $0.055-0.0628; and breaking this could pave the way for steeper declines.
DOGE technical analysis in weekly time frame
DOGE is in a downtrend on the weekly time frame. The price has fallen below the blue box, which was a key support, and is now acting as resistance.
If the market doesn’t turn from bearish to bullish, DOGE will likely fall towards the… pic.twitter.com/ukbVPEArsG
— Cryptorphic (@Cryptorphic1) August 15, 2024
Dogecoin: market sentiment
Market sentiment is now the key to Dogecoin’s immediate fate. Overall, it’s not very optimistic at the moment. The change in the status quo, i.e. DOGE returning to a strong bearish reaction, would require the market to change significantly.
Absent that level of market reaction, there could be a downward extension DOGE Award. However, if the coin tries to move higher, resistance is seen at $0.104 and $0.118. At the same time, the support accumulation zone is marked at $0.6243. Should DOGE manage to rise above these key levels, the short-term outlook remains uncertain.
Data and holder behavior in the chain
However, data from IntoTheBlock’s on-chain could provide some insight into holder sentiment. The data showed that about 73% of current Dogecoin holders are making a profit at current prices. In particular, 67% of these holders have held their DOGE for more than a year, in other words, strong hands in the market. While the short-term outlook remains cautious, there is serious investor confidence in the longer term.
Long-term potential and forecast
While resistance currently persists, there appears to be a silver lining for DOGE’s longer-term growth. For the next three months, CoinCheckup reports that DOGE is is expected to rise by 114%. And all these potential highs can be supported by technical indicators: at the time of writing, both the Relative Strength Indicator (RSI) and the Moving Average Convergence Divergence (MACD) suggest upside.
With a position above key support levels and the overall crypto market remaining firm, this should translate into huge gains.
Six months later, the prospects look bright: there could be a growth of 61.58%. This is a medium-term look at the projections for Dogecoin. Demand for Dogecoin is expected to increase by 64.49% by the end of the year and demand for Dogecoin and its compatibility with the progressive positive development taking shape within the cryptocurrency ecosystem will drive growth.
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The way forward
In the short term, Dogecoin remains uncertain amid bearish trends and critical support levels. Nevertheless, the long-term outlook looks promising if market conditions were to improve. Data showing that most long-term holders are currently making profits adds another layer of optimism. Investors should exercise due care in maintaining a balance between optimism and caution, while simultaneously monitoring technical indicators and overall market direction.
Featured image of X/@adultswimmingchart from TradingView
