Dogecoin Faces Sharp Decline as Death Cross Signals Deeper Losses

Dogecoin has experienced a notable decline, dropping nearly 18% in the past month. Prices have dipped below $0.17 and are currently testing a critical support level at $0.137.

The emergence of a death cross, where the short-term moving average crosses below the long-term moving average, suggests increasing bearish momentum in the DOGE market. This technical pattern often signals a potential for further price decreases.

Dogecoin is currently trading just above a key support area around $0.137, which aligns with its 200-day moving average on the weekly chart. Should this support level fail to hold, analysts predict a potential 20% drop from current levels, potentially pushing the price back down to $0.13.

Source: TradingView

Analyzing the weekly charts reveals that the 23-week moving average has already fallen below the 50-week moving average, confirming the death cross. Historically, such formations have often been followed by further declines, particularly in sentiment-driven assets like Dogecoin. This technical indicator, combined with the current market backdrop, is adding pressure to Dogecoin holders and the broader cryptocurrency market.

Overall market sentiment is weakening as a broader market downturn takes hold. The hype surrounding meme coins, including Dogecoin, has diminished as the crypto market undergoes a speculative cool-off. A recent liquidation imbalance has further impacted long positions, exacerbating the existing downward trend. This confluence of factors, coupled with the technical breakdown, paints a cautious outlook for Dogecoin in the near term.

Dogecoin is currently exhibiting strong bearish signals as key technical levels are breached and trading activity weakens. While short-term bounces are possible, the appearance of the death cross and the inability to maintain support suggest the potential for further downside, potentially leading to prices lower than those seen at the start of 2023.