Dogecoin’s price is down today, primarily due to technical factors and a broader correction in the cryptocurrency market. The memecoin has experienced a drop of over 3.5% to $0.076, underperforming the overall market’s 1.25% decline. This pullback is attributed to several reasons:
1. Bearish Divergence: There has been a growing bearish divergence between Dogecoin’s price and a key momentum indicator. While the price formed higher highs between October and November, the daily relative strength index (RSI) dropped, indicating weakness in the uptrend.
2. Rising Bitcoin Dominance: The decline in Dogecoin’s price is part of a broader decrease in the altcoin market weight compared to Bitcoin. Traders have been rotating their capital from altcoins to Bitcoin, as seen in the rising Bitcoin Dominance Index.
3. Psychological Resistance: Dogecoin faced a bearish rejection near its 0.236 Fib line at $0.081, which has acted as a strong distribution area since May 2023. The failure to close above this level suggests a high likelihood of continued pullback, with the 50-day exponential moving average (50-day EMA) near $0.072 as the primary downside target.
4. DOGE Whales Selling: The decline in Dogecoin’s price coincides with a reduction in supply held by its richest investors. Addresses with balances between 100 million and 1 billion DOGE tokens have decreased, while those holding over 1 billion DOGE have increased, potentially indicating whales transferring their holdings for selling purposes.
In summary:
– Dogecoin’s price is down today due to technical factors and a broader correction in the cryptocurrency market.
– Bearish divergence between price and RSI suggests weakness in the uptrend.
– Rising Bitcoin dominance has led to a decrease in altcoin market weight.
– Dogecoin faced a bearish rejection at a strong distribution area near $0.081.
– Reduction in supply held by DOGE whales may indicate selling pressure.
– The future of Dogecoin’s bull market depends on breaking above the upper trendline of its descending triangle setup. Failure to do so could result in further decline.