Dogecoin's (DOGE) Crucial Test Looms Amid Market Sell-off: Details

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Dogecoin (DOGE) is currently navigating a period of downward pressure, edging closer to a critical support level as market-wide weakness persists. Having experienced declines for the past five days, DOGE is rapidly approaching its 200-day Simple Moving Average (SMA), which currently sits at approximately $0.216.

The 200-day SMA is a widely recognized technical indicator used across both cryptocurrency and traditional financial markets. It often functions as a dynamic support or resistance level, providing traders with insights into the overall trend of an asset.

Dogecoin is presently trading just above this significant moving average, having touched an intraday low of $0.222. A definitive retest of this level is anticipated in the near future, particularly as selling pressure continues to impact the broader cryptocurrency market.

On Friday, the cryptocurrency market experienced significant liquidations, exceeding half a billion dollars, as Bitcoin's price dipped below $116,000 amidst a widespread sell-off. Data from CoinGlass indicates that $536 million in crypto positions were liquidated, with long positions accounting for $406 million of that amount.

Dogecoin was recently trading at around $0.224, reflecting a 5.98% decrease over the last 24 hours, mirroring the overall market downturn.

Will Bulls Hold the Line?

As Dogecoin nears its 200-day SMA support level, traders are closely observing its reaction to this key point. A rebound from this level could potentially trigger a renewed upward trend, while a break below it might indicate further downside risk.

Broader market sentiment will also be a key factor to watch. A recovery in Bitcoin's price could provide Dogecoin bulls with an opportunity to regroup and regain momentum.

In a potentially positive development for Dogecoin, Bitcoin miner Bit Origin recently finalized the acquisition of 40.5 million Dogecoin for its crypto treasury. Read original article on U.Today