how low can DOGE fall?

Dogecoin price fell sharply as the selloff intensified in the crypto industry following the extremely hawkish Fed decision.

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

Dogecoin’s collapse is linked to growing fear in the crypto industry, leading to panic selling among investors. Cryptocurrency remains highly volatile as most participants are retail investors with short investment horizons.

DOGE’s decline shows that the cryptocurrency has entered the discount phase of the Wyckoff Method, weeks after the distribution phase. Wyckoff’s framework identifies four stages that assets go through: accumulation, price appreciation, distribution, and discount.

In Dogecoin’s case, the accumulation phase occurred between April and November, marked by limited price movement. This was followed by a price increase phase that caused a parabolic rise as demand was higher than supply. Prices stabilized as smart investors emerged during the distribution phase. Now with the price reduction, supply exceeds demand, leading to panic selling.

Dogecoin’s decline was also affected by doubts about Elon Musk’s Ministry of Government Efficiency initiative. Musk and Vivek Ramaswamy aim to reduce government spending by over $2 trillion through measures such as mass layoffs. But analysts argue that such changes are possible in the private sector but face significant regulatory and political resistance in government.

Dogecoin price analysis: How low can DOGE fall? DOGE price chart | Source: crypto.news

DOGE price rose to $0.4853, a key level near the extreme limit of the Murrey Math lines tool. It has since fallen below the strong pivot swing and the 50-day moving average.

The accumulation/distribution indicator points downwards, indicating that the distribution is continuing.

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

A decline below $0.2293 could increase the likelihood of DOGE falling to the major support/resistance pivot at $0.1953, approximately 30% below the current price.

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