Dogecoin price analysis: Is a retest of $0.05 possible?
Dogecoin (DOGE) was the second-most searched cryptocurrency globally in 2022, research by the personal finance portal DollarGeek found. The meme coin was the subject of an average of 5.85 million searches worldwide in 2022. Though DOGE is down about 58% in 2022, it is the third-best performer among the top 10 cryptocurrencies by market capitalisation, data from Crypto Bubbles reveals. This shows the kind of carnage in the crypto space this year. The bears are trying to increase the damage in DOGE by pulling the price below $0.07 as of 28 December 2022.
Dogecoin, which had rallied after Elon Musk’s purchase of Twitter, plunged more than 9% on 19 December, after an online poll conducted by Musk showed that the majority wanted him to step down as the head of the social media platform.
Should I step down as head of Twitter? I will abide by the results of this poll.
— Elon Musk (@elonmusk) December 18, 2022
In a year of major upheaval in the cryptocurrency markets, the market capitalisation of Coinbase Global Inc, the largest public digital-asset exchange in the United States, fell below Dogecoin.
Will the new year attract buyers? Could dogecoin go up? Read the DOGE price analysis to find out.
Dogecoin price technical analysis: Weekly chart
Dogecoin weekly price chart for 28 December 2022 – Source: Capital.com
DOGE’s price has been trading below the moving averages, and the relative strength index (RSI) has dipped into negative territory. This indicates that the momentum has turned bearish in the near term.
The bears will try to maintain the selling pressure and pull the price to the pivotal support near $0.05. This level is likely to attract huge buying by the bulls b,ecause if this support cracks, the selling could intensify and the DOGE/USD pair could resume the downtrend.
If bulls want to prevent this decline, they will have to quickly push the price above the moving averages, and the overhead resistance at $0.11. The pair could then climb to $0.18, where the bears may again mount a strong defence.
Dogecoin price technical analysis: Daily chart
Dogecoin daily price chart for 28 December 2022 – Source: Capital.comDogecoin’s price has formed a bearish descending triangle pattern, which will complete on a break and close below the vital support at $0.07. The downsloping moving averages and the RSI in negative territory indicate that bears hold the advantage.
If the price breaks and sustains below $0.07, it could start a short-term downtrend. The pair could gradually drift lower and retest the June low near $0.05.
Contrary to this assumption, if the price rebounds off the current level at $0.07, it will suggest that bulls continue to defend this support with all their might. The pair could then recover to the 20-day exponential moving average (EMA) and later to the 50-day simple moving average (SMA).
A break above this resistance zone could indicate that the bears may be losing their grip. That could also signal the formation of a higher low at $0.07. The pair could then rally to $0.11. If the price turns down from this resistance, the pair may remain range-bound between $0.07 and $0.11 for a few days.
Dogecoin: Buy or sell this week?
Dogecoin is at a critical juncture. If the price falls below $0.07, dogecoin’s price analysis suggests a drop to $0.05. Conversely, if the price rebounds off the current level and breaks above the resistance line of the triangle, it could attract buyers. The pair could then rally to the overhead resistance at $0.11.
The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial adviser before arriving at a decision.
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