The price of Dogecoin continued its downward movement on Monday, coinciding with declines in both the crypto and stock markets.
Dogecoin (DOGE), the leading meme coin in the crypto space, fell to a low of $0.1628, marking its lowest point since March 12. This represents a decline of over 66% from its peak in December.
The downturn in DOGE’s value occurred as investors adopted a risk-averse attitude ahead of Donald Trump’s anticipated Liberation Day, during which he intends to impose reciprocal tariffs on many US trading partners, potentially heightening the risk of a recession.
These economic anxieties have triggered apprehension across the crypto and stock markets. The crypto fear and greed index has plummeted into the fear zone at 24, while the stock market gauge has fallen into the extreme fear territory at 18.
On the brighter side for Dogecoin and other cryptocurrencies, the growing likelihood of a recession might prompt the Federal Reserve to step in. Historically, the Fed has reacted to significant unexpected events, such as the COVID-19 pandemic and the Global Financial Crisis, by lowering interest rates and introducing quantitative easing measures.
Technical Analysis of Dogecoin Price
The daily chart indicates that DOGE has been undergoing a significant downtrend over recent months, sliding from a high of $0.4836 in December to its current level of $0.1630.
Dogecoin has fallen below the 200-day Exponential Moving Average, illustrating that bearish sentiment is prevailing. Additionally, it has breached a critical support level at $0.2260, which represented the highest swing on March 28 of the previous year. This level also corresponded with the upper boundary of the cup and handle pattern that materialized in 2023.
The lowest price for Dogecoin this year was $0.1430, recorded on July 21. Notably, a falling wedge pattern has emerged, which is a rare bullish reversal indicator. The price has already moved above the upper boundary of this wedge pattern.
The current pullback suggests that the coin may be attempting to establish a double-bottom pattern at $0.1430, with a neckline positioned at $0.2057.
Thus, there exists a chance that the coin could dip to $0.1430 before the tariff announcement, followed by a potential rebound in April. Should this scenario materialize, DOGE could surge to $0.2628, signifying a 60% increase from present levels.
However, a decline below the support at $0.1430 would undermine this optimistic perspective.