The Dogecoin price is attempting to recover, a few days after it declined by more than 65% from its all-time high of $0.4492 to $0.1551. DOGE is currently trading at $0.2625, which is 67% above its lowest level last week. Data compiled by CoinMarketCap shows that the currency is worth more than $33 billion, making it the 7th largest cryptocurrency in the world.
What happened: Most cryptocurrencies tend to follow Bitcoin. Last week, the BTC suffered a major decline as investors searched for more catalysts. At its climax, the BTC price dropped by more than $15,000 from its all-time high. As this happened, other smaller cryptocurrencies like Dogecoin and Ripple dropped sharply.
This decline was mostly because of profit-taking and the fact that the price had gone too far within a relatively short period. When that happens, many bulls tend to exit, in a process known as distribution. So, what next for the Dogecoin price?
This week, the price will mostly depend on how Bitcoin will react to the Fed interest rate decision on Wednesday. If the Fed sounds hawkish – i.e hints that it will start tightening – it could lead to a deeper correction. If it insists that it will neither hike nor taper, the currency could keep rising.
Dogecoin price prediction
The daily chart below shows that the DOGE price is in a price discovery mode. It is still slightly above the 50% Fibonacci retracement level and is along the short and longer-term moving averages. Its volatility, as measured by the Average True Range (ATR) has also dropped to the lowest level since April 16.
Therefore, the currency may remain at this range as the market waits for another catalyst. The key levels to watch will be the support and resistance at $0.20 and $0.30, respectively.