Dogecoin (DOGE) Plunges 5%... ETF Closure, CLARITY Act Rejection 'Double Whammy'

▲ Dogecoin (DOGE), bear market/AI generated image ©

Dogecoin (DOGE) plunged more than 5% in a single day, falling to the $0.08 level. Selling pressure intensified due to a combination of factors: institutional demand weakness highlighted by Bitwise's decision to close its Dogecoin ETF, the rejection of the CLARITY Act (a US cryptocurrency market structure bill) in a Senate procedural vote, and risk aversion ahead of the Fed's interest rate decision.

According to CoinMarketCap, a cryptocurrency market data aggregator, Dogecoin recorded a 5.36% decline over 24 hours, trading at $0.0803 as of September 15 (local time). The most direct individual negative factor was Bitwise's decision to liquidate and close its Dogecoin ETF. The final trading day is scheduled for October 14, and the product's net assets amounted to only $722,000. The limited institutional demand for regulated DOGE investment products was highlighted, putting a damper on expectations for institutional adoption.

Furthermore, the overall deterioration of investor sentiment in the cryptocurrency market following the rejection of the CLARITY Act also exacerbated DOGE's decline. The US Senate failed to secure the 60 votes needed for a cloture vote to advance the CLARITY Act, setting back expectations for regulatory clarity. As risk-off sentiment spread, Bitcoin (BTC) fell by 4.06%, and Dogecoin, with its relatively higher volatility, could not escape the broader market's selling pressure.

The technical trend also turned bearish. DOGE traded below both its 7-day and 30-day moving averages, and its Relative Strength Index (RSI) dropped to 31.66. While there is still room for a short-term rebound as it approaches oversold territory, bearish momentum currently predominates. This situation is a combination of market-wide risk aversion triggered by the CLARITY Act rejection, the individual negative factor of the ETF closure, and a break below technical support levels.

In the short term, $0.0790 is a critical defense line. If this price level holds, there is a possibility of a short-term rebound towards $0.0843, but if $0.0790 is breached, there is a risk of a further decline to $0.075. As whale investors have recently purchased over 240 million DOGE, it remains to be seen whether this buying pressure can support the price during a downturn.

Following the rejection of the CLARITY Act, the market's next focus shifts to the Fed's monetary policy announcement on the 16th. A hawkish outcome could put additional pressure on DOGE's $0.0790 support level, while a calming of overall market risk aversion could provide an opportunity for a rebound from the oversold zone. For the time being, Dogecoin appears to have to contend with three variables simultaneously: institutional demand concerns due to the ETF closure, regulatory uncertainty, and the Fed.

*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.*