How far can DOGE fall?

Dogecoin price fell as the sell-off in the cryptocurrency industry intensified following the Fed’s ultra-hawkish decision.

Dogecoin (Doug) for five consecutive days, reaching its lowest level since November 11. It has fallen approximately 45% from its monthly high, entering a deep bear market.

The collapse of Dogecoin is linked to growing fear in the cryptocurrency industry, leading to panic selling among investors. Cryptocurrencies remain very volatile, as most participants are individual investors with short investment horizons.

The DOGE decline indicates that the coin has entered the markdown phase of the Wyckoff method, weeks after the distribution phase. Wyckoff’s framework identifies four stages that assets go through: accumulation, symbolization, distribution, and reduction.

In the case of Dogecoin, the accumulation phase occurred between April and November, and is characterized by limited price movement. A markup phase followed, driven by demand rising above supply, causing a parabolic rise. The distribution phase saw prices stabilize as smart investors exited. Now, in a markdown, supply exceeds demand, leading to panic selling.

Dogecoin’s decline is also affected by doubts about Elon Musk’s government efficiency management initiative. Musk and Vivek Ramaswamy aim to cut government spending by more than $2 trillion through measures such as mass layoffs. However, analysts argue that such changes are possible in the private sector but face significant regulatory and political resistance in government.

Dogecoin Price Analysis: How Far Can DOGE Go?

DOGE price peaked at $0.4853, a key level near the extreme breakout of the Murrey Math lines tool. It has since fallen below the strong pivot release and the 50-day moving average.

The Accumulation/Distribution indicator is pointing down, indicating a continuous distribution.

The next critical level to watch is $0.2293, which was the swing high in March. This level also aligns with the horizontal line of the cup and handle pattern.

A drop below $0.2293 could increase the possibility of DOGE falling to the major support/resistance axis at $0.1953, roughly 30% below the current price.

Investors should be wary of a dead bounce when considering buying on the dip. DCB occurs when an asset rises in a downtrend for a brief period before resuming its downward trajectory.