Dogecoin has reached a critical support level after a significant decline in recent weeks. Investors are wondering if the memecoin will rise again or face further correction.
Technical Analysis of Dogecoin
Currently, Dogecoin is attempting to hold onto the support at the 200-day moving average ($0.23045), which has previously marked significant recovery zones for DOGE. However, if this support level is lost, a more severe downturn could occur. Fibonacci retracement levels indicate that DOGE has fallen below the 0.618 Fibonacci level ($0.39485), typically considered a signal for trend continuation.
Indicators and Network Activity
The Relative Strength Index (RSI) for Dogecoin is currently at 33.32, which is near the oversold territory. Generally, an RSI below 30 suggests a potential price recovery; however, if market sentiment remains weak, this rebound could be delayed. Moreover, there has been a notable decline in the number of active wallet addresses on the network (from 9.8 million in December to just 1.32 million now), indicating reduced network activity and waning investor interest.
Key Takeaways for Traders
Traders should closely monitor whether DOGE can maintain its position at the $0.23045 level. If this level is lost, the next key support is around $0.20. It is essential to pay attention to fundamental technical indicators and network activity before making short-term moves.
Dogecoin is on the verge of important changes in its price movement. Monitoring support levels and technical indicators is crucial for traders to make informed decisions.
