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Dogecoin’s DOGE is down 4% in 24 hours
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Most cryptocurrencies are falling ahead of inflation data on Wednesday
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DOGE could touch the $0.05 bottom if the current weakness persists
Dogecoin’s DOGE/USD trades at $0.0645. The price is a drop of more than 4% in 24 hours as most cryptocurrencies fell on Monday. DOGE now risks crashing back to the $0.05 bottom if the current weak sentiment prevails.
The price of Dogecoin has historically been fueled by social media mentions and listings. The cryptocurrency is labeled a meme coin owing to its reactions to influencer mentions. Elon Musk, the Tesla CEO, has been influential for the token. Recently, speculations were that Twitter would allow DOGE payments once acquired by Musk. With the acquisition now in doubt, DOGE users could be coiling back after a not-so-good crypto sentiment.
Dogecoin’s weakness is also stemming from the overall decline in cryptocurrencies. As of the time of writing, Bitcoin and Ethereum had fallen by more than 3%. The weakness could be reflecting concerns about tighter policy by the Federal Reserve. An inflation data expected on Wednesday is expected to be a turning point for cryptocurrencies. A high inflation jump could fuel a faster action by the central bank and lead to a further drop in cryptocurrencies.
DOGE falls below a short-term moving average
Source – TradingView
Technically, DOGE is bearish. The price fell below the 14-day and 21-day moving averages, affirming the bearish pressure. The price is yet to enter the oversold level as the meme coin attracted buyers recently. The price could continue falling to find the previous support at $0.05.
Concluding thoughts
Investors should not buy DOGE now as the price is under bear control. The price could rise if sentiment improves, but before then, it could touch the $0.05 bottom. The inflation data on Wednesday is a key event to watch.