Dogecoin (DOGE), 10% further drop 'warning light'... Are whales also cutting their losses?

▲ Dogecoin (DOGE)

Dogecoin (DOGE) is on the verge of breaking its $0.071 support line, leading to a warning of a further 10% drop. While technical analysis and on-chain indicators both point to $0.06-$0.063, the conflict between the US and Iran is fueling oil price and interest rate instability, adding to selling pressure.

According to financial media outlet FXEmpire on July 9 (local time), Dogecoin has fallen approximately 50% over the past year and is forming an inverse cup and handle pattern on the 4-hour chart, indicating potential for continued bearishness. After rebounding from around $0.071 to $0.079, it fell back to the $0.071-$0.072 support range and attempted a small rebound around $0.073.

The key price level is $0.071. If this support line clearly breaks, a downtrend pattern will be confirmed, with a target price of approximately $0.063. Dogecoin remains below the 20, 50, 100, and 200 exponential moving averages, indicating that sellers still dominate the 4-hour chart. The Relative Strength Index (RSI) is also around 38, suggesting there is still room for further decline before reaching the oversold zone.

On-chain indicators also pointed to a similar price range. In Glassnode's Market Value to Realized Value (MVRV) Z-score extreme deviation price range, Dogecoin has fallen below minus 0.5 standard deviations and is approaching the minus 1.0 standard deviation range around $0.06. FXEmpire noted that $0.06 aligns with the inverse cup and handle pattern's target price of $0.063.

However, approaching $0.06 does not immediately mean a bottom formation. In past bear markets, Dogecoin has spent extended periods in the lower range of MVRV before beginning a full recovery. The analysis suggests that the technical target and on-chain price range overlapping at $0.06-$0.063 increases the likelihood of testing this price level.

The military conflict between the US and Iran is also a burden. Brent crude oil briefly approached $80 per barrel, and CME data showed a 50.8% probability of a 0.25 percentage point interest rate hike in September. Including the possibility of a larger hike, the probability of a September rate hike is approximately 66%. The analysis suggests that if rising oil prices increase inflationary pressure and strengthen the US Federal Reserve's interest rate hike outlook, selling pressure on risky assets like Dogecoin could increase.

[Article Key Summary]

-Technical analysis indicates that Dogecoin could fall by more than 10% to $0.063 if the $0.071 support line breaks.

-The Market Value to Realized Value indicator also points to around $0.06, aligning the technical target price with the on-chain price range.

-The probability of a US benchmark interest rate hike in September, including the possibility of a larger increase, is approximately 66%, posing a burden on risky assets.

*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*