The Dogecoin price is set to revisit the important momentum indicator. Last time a 90% rally followed. But wIll DOGE respond as well this time around?
Dogecoin is trading at $0.2016, down $0.0059 (-2.97%).
DOGE continues to trade with a negative bias in unison with the majority of the market. Surprisingly for many, Dogecoin remains one of the more successful crypto projects and is currently ranked as the 7th largest cryptocurrency behind the more established Ripple. DOGE currently has a market cap of close to $27 billion, some way off its $93 billion peak valuation in May.
However, considering the sluggish price performance of late, the dog coin’s market cap may soon shrink even more.
The Dogecoin price remains in the grips of a strong downtrend from early June, forcing the coin towards the significant support of the 200-day moving average at $0.1753. Should DOGE test this support, it will mark only the second time in 2021.
The daily chart points out two important factors that have shaped the price narrative recently.
The first is a descending trend from the 7th of June, exerting downside pressure on the price. This is visible at $0.223 and coincidently aligns with a horizontal resistance level, which adds to the validity of this obstacle.
Secondly, the key 200 DMA below the price at $0.1753 was responsible for reversing the 22nd of June collapse. I would consider this the most important level for DOGE investors. If Dogecoin loses this support, there really isn’t much to stop it from dropping back to $0.0700, Around 65% below the latest price.
Therefore, the price must sustain this level. However, until DOGE clears the descending trend, a test of the 200 DMA looks probable. And for the bulls, I hope the price reacts as positively as it did on the last visit.
Of course, if Dogecoin manages to climb above the descending trendline, it invalidates the bearish outlook and suggests there is some life in the old dog yet.
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