Dogecoin price has crashed hard this week, mirroring the ongoing performance in the broad cryptocurrency industry. DOGE retreated to a low of $0.4127 on Tuesday morning, down by 15% from the year-to-date high.
Here’s why Dogecoin price is falling
DOGE’s price crashed hard because of the ongoing softening in the crypto industry. Bitcoin, the biggest crypto industry player, has dropped below $96,000 a week after surging to a record high.
There are odds that Bitcoin price may drop to $90,000 because it has formed a rising wedge pattern and bearish divergences. A rising wedge happens when an asset forms two ascending and converging trendlines.
The Dogecoin price is also falling after Mark Zandi, Moody’s chief economist, warned of the risk posed by the Treasury market in an X post. He said that most cryptocurrencies and stocks were now severely overvalued.
The trigger for the next reversal will be the bond market, which may see heightened volatility in 2025. The US public debt has jumped to over $36 trillion, a trend that will accelerate when Trump slashes taxes.
This debt rise is happening when countries like China and Japan are no longer buying US debt. Therefore, he expects that bond yields will surge in 2025, leading to rotation from risky assets.
Dogecoin price also dropped as the altcoin season index pulled back. After rising to 87 last week, it has moved to 68, meaning that fewer altcoins are beating Bitcoin this week. Most altcoins tend to drop when the index is falling. Similarly, the crypto fear and greed index has dropped from last week’s high of 85 to 83.
Read more: Dogecoin Price Prediction: Can DOGE Really Jump to $1 in 2024?
Dogecoin price forecast
The daily chart shows that the DOGE price peaked at $0.4800 this month. It has remained above the 50-day and 100-day Exponential Moving Averages (EMA). As such, this retreat could be part of the mean reversion approach. Mean reversion is a situation where cryptocurrencies move back to the moving averages after having a strong rally.
Dogecoin price retreat has happened after the coin formed an ascending channel. This channel formed the coin’s Relative Strength Index (RSI), and the MACD indicators formed a bearish divergence pattern.
Therefore, DOGE price may drop to the 50-day moving average at $0.3297 and then resume the uptrend. A sustained rally will be confirmed when the coin rallies above the key resistance level at $0.4800, its highest level this week.
Read more: Dogecoin Price Prediction: Veteran Trader Sees DOGE Hitting $0.7
