Dogecoin Disaster Looms – Traders Brace for a Drop to $0.20

Dogecoin (DOGE) is again at the center of market turbulence, with its price declining to $0.23 after an 8.55% drop over the past week.

As bearish momentum builds, traders are closely watching the psychological support level at $0.20. Despite its status as the original meme coin, Dogecoin is struggling to regain bullish traction, with multiple technical indicators suggesting further downside.

Bearish Sentiment Grows as DOGE Struggles

Dogecoin’s recent drop is part of a broader sell-off within the cryptocurrency market and especially the meme coin sector. Coinglass statistics indicate that the long-to-short ratio is under one, indicating that more traders are anticipating Dogecoin’s price to fall lower than to return upward. This shift in sentiment has made fears more profound that DOGE might be on its way to test the $0.20 level in the near future, a pivotal support that, if violated, would cause a steeper correction.

Dogecoin is declining to November 2024 lows amid market volatility, regulatory concerns, and broader crypto downturns. Source: FatRatKiller via X

Adding to the bearishness, Dogecoin has been recently unable to overcome the $0.27 resistance level. Its inability to do so has served to further augment downward pressure, with technical experts warning that DOGE could continue to decline unless buyers step in with high volumes.

Technical Indicators Point to Further Weakness

The Relative Strength Index (RSI), one of the most important momentum indicators, is moving toward oversold levels. At near 32, the RSI indicates that bearish sentiment dominates any possible bullish rebound. Should this continue, Dogecoin may experience further downward pressure in the next few days.

Dogecoin (DOGE) is expected to retest the critical support near $0.20. Source: SroshMayi on TradingView

Meanwhile, technical analysts are referring to a potential “death cross” formation on Dogecoin’s chart, as the 23-day moving average is set to fall below the 200-day moving average. Such a crossover in the past has signaled extended bearish momentum, which would drive DOGE to the $0.18 support level. Worst-case scenario, if things turn south, analysts warn that Dogecoin can dip as low as $0.13, a steep decline from its recent high.

The LIBRA Token Collapse and Broader Market Pressures

Aside from technical cues, fundamental market pressures have also come against Dogecoin. The recent collapse of the LIBRA token, a meme coin linked to Argentine President Javier Milei, sent the cryptocurrency space into panic. LIBRA surged to a $4.5 billion market cap before collapsing over 90% on insider cash-out and liquidation withdrawal fees. This created a widespread bout of sell pressure across the meme coin universe, with DOGE no exception.

Javier Milei gifted Elon Musk a DOGE-themed chainsaw, while his meme coin $LIBRA faces a complete downturn. Source: Blockchain North via X

In addition, macroeconomic problems such as rising Treasury bond yields and potential new trade tariffs further helped to perpetuate subdued investor sentiment. Such broader financial patterns have helped push the crypto market to greater volatility, making riskier assets such as Dogecoin extremely vulnerable to price variations.

What’s Next for Dogecoin?

While the short-term outlook remains uncertain, Dogecoin’s long-term prospects remain a point of debate among analysts. Some models suggest that a reversal is likely if DOGE can reclaim the $0.30 resistance level. Others, however, caution that additional weakness can prolong the downtrend.

Dogecoin (DOGE) was trading at around $0.23, down 5.62% in the last 24 hours at press time. Source: Brave New Coin

Even with the prevailing bearish trend, Dogecoin still holds a strong position in the meme coin territory due to a robust support base and continued mainstream popularity. Whether the coin bounces back or continues falling will be determined by the way the general market trends progress and if the buyers get confidence back in the asset.

For now, traders remain cautious, keeping a close watch on the critical $0.20 support level as DOGE navigates this volatile phase.

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