The Dogecoin price has crashed over the past few months, moving from $0.4840 in November to $0.20 today. It has entered a deep bear market, and there is a risk that the downward trajectory will continue. Here are three reasons to sell DOGE and step away.
Dogecoin Price Has Formed a Death Cross
The first main reason you should sell DOGE is that it has formed a death cross on the daily chart. In this, the 200-day and 50-day Weighted Moving Average (WMA) have formed a bearish crossover.
A death cross is one of the riskiest chart patterns in technical analysis. The WMA indicator is more responsive than the exponential or the simple moving average because it focuses on the most recent data.
Worse, Dogecoin price has moved below the 61.8% Fibonacci Retracement level, which is usually seen as the golden point for pullbacks. The Average Directional Index (ADX), a popular indicator that measures the strength of a trend, has risen to 42, signaling that the downward momentum may continue.
Tesla Stock Crash May See Musk Exit DOGE
Dogecoin is a cryptocurrency that Elon Musk popularized. Its price surged late last year after Donald Trump won the election and appointed Musk as the head of the Department of Government Efficiency, also known as D.O.G.E.
Musk’s involvement in DOGE is one of the top reasons the Tesla stock price has plummeted to $281 from last year’s high, which was near $500. That’s because analysts and investors believe that he is spending a lot of time at DOGE, and neglecting his company, Tesla.
Now, with the stock crashing, and his net worth falling by $83 billion this year, there is a risk that he may decide to exit D.O.G.E to refocus on Tesla. Such a move would likely affect the Dogecoin price.
Extreme Fear in the Market
Further, from a macro level, the Dogecoin price may crash as a sense of fear lingers in the market. The CNN Money fear and greed index has plunged to the extreme fear zone 18. Similarly, the crypto fear and greed index has moved to 35.
Risky assets like Dogecoin and other altcoins often plunge when there is a sense of fear in the market. This also explains why spot Bitcoin and Ethereum ETFs have had robust outflows this week. Therefore, DOGE and other altcoins may continue to fall in the near term.
READ MORE: Top 3 Altcoins That Could Make You a Crypto Millionaire by 2030
Disclaimer:
The information provided in this article is for informational and educational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are highly volatile and carry significant risk; therefore, do your own research.
