In recent weeks, the altcoin market, including Dogecoin, has faced downward pressure. Prices of Dogecoin have dropped over 25% in the last four weeks.
Factors Influencing Dogecoin's Medium-Term Outlook
Dogecoin, utilizing the proof of work (PoW) consensus mechanism, has attracted more institutional investors over the past year. In the United States, several fund managers have applied to the SEC for approval of Dogecoin ETFs, awaiting decisions.
Market participants on Polymarket estimate a 67% chance of SEC approval for Dogecoin ETFs by the end of the year. This development is viewed as a significant factor that could support Dogecoin in the medium term.
Short-Term Expectations for Dogecoin's Price
Since the start of 2024, Dogecoin's price has been moving within a bullish channel characterized by higher highs and higher lows. However, the largest memecoin remains entrenched in a noticeable downward trend since the beginning of the year.
On the weekly timeframe, Dogecoin's price seems to be attempting to retest last year's ascending logarithmic trend line. Following a recent encounter with a strong resistance level of approximately $0.25 and subsequent pullback, the memecoin faces a potential 30% drop towards its support level around $0.11.
This short-term bearish scenario is further supported by the downward direction of the MACD indicator's signal line and increasing bearish histogram bars. However, the current short-term bearish pressure on Dogecoin's price could be invalidated if the memecoin consistently breaks through the descending logarithmic trend line established since the start of the year.
Conclusion
The situation with Dogecoin remains uncertain amid current price fluctuations and expectations of ETF approval. Future events may play a significant role in determining the price direction.
Given the current uncertainty, Dogecoin faces challenges; however, potential changes in the regulatory environment could impact its price in the future.
