Dogecoin (DOGE) started the week in the red as the FTX demise continues to wreak havoc in the crypto market. The pioneer cryptocurrency, Bitcoin (BTC) is down 1.55% on the day to trade at $15,743, while the largest altcoin by market capitalization, Ether, is hovering at $1,090. The total crypto market capitalization has dropped by 1.75% and currently stands at $780.75B, according to data from CoinMarketCap.
The FTX contagion continues to spread across the sector, meaning recovery of crypto prices may take longer than investors wish for. However, with a boost of confidence from supporters like Elon Musk, Dogecoin could see a recovery in the near term.
According to Elon Musk, a business mogul and investor, Bitcoin will “make it” in the end. While speaking to All In podcast host Jason Calacanis a few weeks ago, the Tesla billionaire warned that Bitcoin could be in for a “long winter”, adding that DOGE’s eventual recovery “goes without saying.”
Musk first gave his support for the bellwether cryptocurrency in early 2021 when his electric car company Tesla bought $1.5 billion worth of Bitcoin. His attitude toward Bitcoin has grown soar over the last 18 months, instead lending his support to the dog-themed Dogecoin.
Dogecoin Price Holds Onto The Last Line Of Defence at $0.072
The DOGE’s price stretched its leg further down after tanking below the 50-day Simple Moving Average (SMA) which sat at $0.080 on Sunday. Although the level at $0.075 was expected to serve as support, Dogecoin’s price has now fallen lower to $0.073 in line with the broader crypto market.
DOGE must hold firmly above $0.072, where the 100-day and 200-day SMAs appear to coincide, to avoid sinking lower toward $0.070. Buyers should tread carefully, keeping in mind the Relative Strength Index (RSI) has been stuck in the negative region for the past two weeks, an indication that the market favors the downside.
The price strength at 40 suggests that the bears are in control of DOGE, as shown by the four red candlesticks on the daily chart (below). As such, in a highly bearish scenario, Dogecoin may drop further to seek solace from the $0.060 support floor. Such a move would represent a 20% drop from the current price.
DOGE/USD Daily Chart
Also supporting Docecoin’s pessimistic outlook is the downward movement of the Moving Average Convergence Divergence (MACD) indicator which has crossed the zero line into the negative region. This shows that DOGE’s market sentiment still remains negative. Note that the downward movement of the price would gain momentum once the MACD moves further away from the neutral line in the negative zone.
On the upside, if DOGE is able to consolidate above $0.072 for a few days, then it may make another attempt at $0.081, where the 50-day SMA currently sits and higher in the coming weeks. But of course, the crypto markets are not yet out of the woods.
According to CoinGecko, there has been a 33.3% drop in Dogecoin’s price over the last 14 days. Investors are still on high alert due to the FTX fiasco, and some prefer to convert their crypto assets to dollar-pegged stablecoins like USDT.
Large owners have, however, continued to show interest in DOGE despite the huge price drop. From the data below from IntoTheBlock, whales are taking advantage of the lower-priced Dogecoin to fill their reserves. The total number of addresses with 1M to 10M tokens has risen to 3,870 from around 3,500 at the end of October.
Dogecoin Addresses By Holdings
A similar growth pattern was reflected among addresses with over 10K to 100K DOGE, which currently stand at 173,430 from a 30-day low of 160,000. This trend shows that investors have confidence in the future of Dogecoin, despite the short-term price corrections.
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