While the crypto markets continue to maintain a stagnant trend, the price of Dogecoin witnessed a massive plunge of nearly 8%. The price dropped from the interim highs of around $0.09 and is currently trading around $0.084. The reason behind the gigantic fall is the same as the one that led the price to rise so high a couple of days before.
Tesla and Twitter CEO, Elon Musk, who openly promotes Dogecoin, recently changed the Twitter logo from the bluebird to DOGE. This led to a lot of speculation and interpretation, propelling the price by more than 20%. However, the upswing failed to clinch the highs above $0.1, as the bears restricted the price to $0.092.
In the recent update, the logo was removed and the original logo was restored. This created massive FUD among the market participants, who began to liquidate, creating massive selling pressure. The descending trend may further drag the price lower to its initial levels very soon.
The DOGE price maintained a silent trend along the lower trend line until the logo was replaced, which shot up the price to reach the upper resistance in no time. However, the price, which had already begun to consolidate, dropped heavily as the original logo was restored.
Presently, the price is testing one of the interim supports at 50-day MA levels in the short term which may not be held tightly.
The RSI is heading towards oversold levels, while the strength of the rally calculated by the ADX is also plunging down. This may drive the price lower to reach the support levels, which reside along the lower trend line of the rising wedge pattern.
Hence the bearish cartel may not remain aloof from the Dogecoin (DOGE) price and the investors need to thoroughly look out for short-term swings which are largely impacted by external factors.
Source: https://coinpedia.org/price-analysis/why-is-dogecoin-going-down-elon-musk-dumped-doge-again/