Recently, the major meme cryptocurrency Dogecoin has shown early signs that may signal its price could decrease further. At the center of this is a 'death cross', a situation where a short-term moving average crosses below a long-term one.
What is a 'Death Cross'?
A death cross is a technical indicator that points to a bearish trend on the market. It occurs when a short-term moving average crosses below a long-term moving average. In the case of Dogecoin, this event is expected between its 23-day and 200-day moving averages.
Impact on Dogecoin Price
If this unfavorable scenario unfolds, Dogecoin's price may drop to $0.18, a strong support level, representing a 26% drop from its current price point. The worst scenario could see Dogecoin revisiting its pre-November pump levels around $0.13, marking a 40% decline from recent levels and a 72% drop from local peaks.
Alternative Scenarios for DOGE
There's a chance the market has already factored in the death cross, and it could mark the bottom for Dogecoin. This might be a bear trap, with the price stabilizing or even bouncing back post-crossover. It's a complex situation, and traders would do well to keep an eye on more than just this one indicator.
For now, the mood remains cautious regarding Dogecoin. Despite an oversaturated meme cryptocurrency market, Dogecoin is still the most hyped and might gain spotlight again, especially as the SpaceX mission is anticipated.
