Crypto News

Dogecoin, Elon Musk’s pet crypto, dips drastically amid global market correction

dogecoin doge
Image by Trever Gearhart from Pixabay

Yerevan (CoinChapter.com) – Dogecoin (DOGE) exchange rate slid to $0.25 on Monday. The losses were consistent with the rest of the crypto market, which lost 18 percent of its market cap, dropping to $1.35 trillion from the initial $1.65 trillion on June 15.

Also read: Bitcoin sentiment remains gloomy amid surging demand for Fed reverse repos

The ubiquitous correction was initiated on the said date when the US Federal Reserve shifted the planned interest rate hikes from 2024 to 2023. The announcement shaved 19 percent off Bitcoin’s market cap (as a hedge asset against USD inflation) and pushed the price down to $33,127 on June 21.

The alpha crypto brought the rest of the market along for the dive, and Dogecoin was one of the casualties. However, the Shiba-Inu-inspired coin could expect gains in the upcoming sessions based on technical indicators.

Dogecoin daily chart

The meme token traded in a technical formation called a falling wedge.

It is a reversal pattern, meaning once the formation exhausts itself, traders could expect a shift from bearish to a bullish bias. The support trendline of the pattern kept DOGE/USD from plummeting since the May 19 crash. On the other hand, the upper resistance trendline has proven its resilience throughout the last six weeks by capping the sharp breakout attempts.

Together, the indicated trendlines constitute the falling wedge. It makes Dogecoin primed for gains in the upcoming sessions, considering the formation is nearly complete.

DOGE traded in a falling wedge reversal pattern. Source: DOGEUSD on TradingView.com
Dogecoin traded in a falling wedge reversal pattern. Source: DOGEUSD on TradingView.com

Moreover, DOGE/USD arrived at another crucial support margin of $0.25. Doge can bounce back from this line, before making it up to the upper trendline of the wedge, and possibly breaking beyond it. The meme-coin has one more support/resistance line to conquer at the $0.32 price margin.

However, the breakout attempts were also capped by the 20-day exponential moving average (EMA-20). It acted as resistance in confluence with the descending trendline since early June. If Dogecoin manages to maintain a bullish bias above the EMA-20, the said wave could act as additional support.

Also read: Even Elon Musk’s tweets couldn’t save Dogecoin from crashing

If the formation does not pan out and Dogecoin drops below the $0.25 support line, the next significant support is at the $0.047 margin, which assisted the token back in mid-March, before the explosive rally.

Where is Elon Musk?

Elon Musk, the chief executive of Tesla and SpaceX, has had a significant role in pushing the coin forward on social media. His title as the ‘Dogefather’ was reinforced by the flood of memes from the DOGE community in reply to his simple father’s day tweet.

Like the one above, images circulated the Twitterverse, hoping that Mr. Musk could reverse the damage done by the crypto crash. The crash was severe indeed and resulted in Doge losing 25 percent of its value since June 15.

Dogecoin, heavily promoted by Elon Musk, dropped down to $0.25 in the London session Monday, in confluence with the rest of the crypto market. It lost 25 percent since the Federal Reserve announced its rate hikes were pushed to 2023.

The billionaire CEO, or the ‘Dogefather’ has much influence on the DOGE/USD exchange rate, and is yet to respond to the recent crash. However, according to technical indicators, Dogecoin might gain in value soon enough, after the falling wedge formation is exhausted.

Also read: Bitcoin week ahead Ep08: Early Monday sell-off towards $32K spells trouble

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Lilit Chichyan

Lilit is an enthusiastic writer, skilled in 3 languages, and interested in writing about the tech world, trading, art, and science. She also has a background in psychology and marketing, which helps deliver the right message to the target audience. Lilit is creative and fast and has the experience of writing for both big marketing companies and small websites and blogs.

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