- Dogecoin price has dropped by 80% from its all-time high.
- The daily chart shows that it has formed a falling wedge pattern, signaling that a bullish break-out is likely.
The Dogecoin price has been under pressure in the past few months as the momentum on meme coins has waned. The coin is trading at $0.1425, which is about 81% below its all-time high. It's market cap has crashed from a high of over $40 billion to about $18 billion.
Dogecoin sell-off
The latest catalyst for the Dogecoin price action is the ongoing crisis in Ukraine that pushed cryptocurrencies and stocks significantly lower.
According to CoinGecko, the total market cap of all cryptocurrencies has dropped by 6% in the past 24 hours. It currently stands at about $1.95 trillion, which is significantly lower than its all-time high of over $3 trillion.
The main fear is that Russia is committed to attacking Ukraine in a bid to pressure Western countries against letting it join the North Atlantic Treaty Organization (NATO). The potential impacts of this attack to cryptocurrency prices is not yet known.
The Dogecoin price is also falling as investors continue focusing on the Federal Reserve. On Wednesday this week, the Fed published its minutes for the past meeting. The minutes showed that members were more optimistic about hiking interest rates as inflation surges.
Historically, risky assets like Dogecoin and Bitcoin tend to underperform whenever the Fed and other major central banks turn hawkish.
Meanwhile, on-chain data shows that the number of transactions in Dogecoin's ecosystem has declined sharply in the past few months. That's partly because Elon Musk has not made any meaningful mention about the coin recently.
At the same time, the number of social media mentions and Google searches has dropped sharply as the cryptocurrency winter continues.
Dogecoin price prediction
The daily chart shows that the DOGE price has been in a strong bearish trend in the past few months. The trend accelerated when the coin's price reached an all-time high of $0.7766 in May last year.
Recently, however, Dogecoin has been in a tight range and is currently trading along the 25-day and 50-day exponential moving averages (EMA).
A closer look shows that the coin has formed a falling wedge pattern, which is usually a bullish sign. Therefore, since the wedge pattern is nearing its confluence zone, there is a likelihood that the Dogecoin price will bounce back in the coming months. If this happens, the next key level to watch will be at $0.30.
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