Dogecoin [DOGE] was forced to halt its uptrend after Bitcoin’s [BTC] prices toppled below the $70k level. This event also caused bullish conviction to evaporate across the market, at least in the short term.
The trading volume has dropped after the first week of March, indicating reduced fervor behind the meme coin. Technical analysis showed that DOGE could drop toward the $0.1 mark this week.
Yet, its long-term trajectory was bullish. Ali, a popular crypto analyst, posted on X (formerly Twitter) that the recent rally was indicative of a move to $1.
Over-dependence on Musk
The advent of Dogecoin was crucial in preparing the ground for the present expansion of the memecoin arena. The cryptocurrency’s popularity truly took off when Tesla CEO Elon Musk started endorsing the coin.
Musk joined the Dogecoin bandwagon in 2019, primarily as a joke. However, over many months, his social media remarks about Dogecoin lent it more and more credibility.
His earliest mention of Dogecoin came on X (formerly Twitter) in April 2019, when he called it “my fav cryptocurrency.”
DOGE increased by more than 70% immediately following Musk’s disclosure. What was intriguing was that this occurred amid the pinnacle of the bear market.
Since then, the tech mogul has publicly endorsed the memecoin multiple times. He even referred to it as the “people’s crypto” on one occasion, highlighting its widespread use among his company’s blue-collar workers.
Aside from the brief price increases, the Dogecoin community saw a level of optimism never seen before as a consequence of an endorsement by one of the richest people in the world.
And when Musk took over Twitter in the autumn of 2022, the excitement reached new heights.
Elon Musk’s purchase of Twitter marked an iconic moment. As a result of Musk’s announcement, the price of Dogecoin appreciated by more than 100%.
Since Musk-Twitter’s takeover, there have been speculations about incorporating and integrating Dogecoin with X.
The rumors about DOGE being the official means of crypto payment began to grow. Within a week, the meme coin’s value had more than doubled.
However, it’s been months since and Musk has not made any updates on this front yet. Also, this hype didn’t last long.
Due to its over-dependence on Elon Musk, DOGE has not been able to expand its repertory of successful real-world use cases. This caused the memecoin’s price to lag earlier in the year.
A thriving community
Dogecoin was founded in December 2013 as a cryptocurrency based on memes. The introduction of serious digital currencies at the time encouraged the development of this amusing alternative.
Jackson Palmer and Billy Markus, two software developers, co-founded the project to create Dogecoin as a more accessible cryptocurrency than Bitcoin.
In addition to its support for clean water efforts and the Jamaican sledge team, the currency quickly gained a following. Despite its amusing origins, Dogecoin developed a particular charm by incorporating charity, community spirit, and internet culture.
The reason for Dogecoin’s phenomenal growth is its robust and passionate community. This group is well-known for its wit, inclusivity, and common ambition of mocking the significance of Bitcoin.
On social media platforms like Reddit and Twitter, fans built a sense of community by sharing memes, providing suggestions, and endorsing charitable organizations. This gesture attracted new members.
This thriving community contributed to Dogecoin’s continued popularity and global acceptance.
Green light for DOGE-1
In November, the National Telecommunications and Information Administration (NTIA) granted crucial regulatory authorization to the DOGE-funded SpaceX Doge-1 Moon Mission.
A few weeks ago, the Federal Communications Commission authorized the DOGE-1 Moon Mission for launch on the 12th of January 2024. The announcement was made by Doge Norway on X.
He went on to say that the expedition was paid for in DOGE and that it is the first meme crypto in space.
The DOGE-1 satellite project was unveiled by the Geometric Energy Corporation, a space technology corporation, in May 2021.
Elon Musk stated that his spacecraft engineering firm will disclose the Dogecoin-themed voyage to the moon in the first quarter of 2022.
The mission aims to launch the DOGE-1 satellite into lunar orbit, becoming the first spacecraft entirely sponsored by Dogecoin. The SpaceX Falcon 9 rocket will be used to launch DOGE-1 into space, demonstrating Dogecoin’s foray into cosmic realms.
Following the (NTIA) clearance, Dogecoin’s value hiked significantly.
Technical analysis of Dogecoin
Source: DOGE/USDT on TradingView
The one-day chart showed that the strong uptrend seen in late February stalled near the $0.2 resistance. Measured from the local swing high at $0.206, DOGE has shed just over 30% in value in less than two weeks.
The $0.194 resistance was retested on the 14th of March. Thereafter, DOGE bears forced prices lower by 26% and counting at press time.
The Fibonacci retracement levels showed that a drop to $0.129 or $0.108 was still likely. These were the 61.8% and 78.6% retracement levels, respectively.
While the market structure on the daily chart was bullish, the momentum was neutral.
The RSI showed a reading of 51 to reflect the recent downward pressure. On the other hand, the OBV hardly halted its uptrend. This suggested that despite the large price correction, the selling volume was not high.
The inference was that DOGE could resume its rally with renewed strength once the market sentiment begins to shift bullishly.
Speculators chose to stay sidelined as the uptrend was interrupted
Source: Santiment
DOGE’s Open Interest has fallen dramatically in the past few days. On the 14th of March, it reached $489 million. At press time on the 17th of March, it stood at $334 million.
The decline in OI alongside the prices highlighted bearish sentiment in the short term.
The MVRV also took a hit after reaching highs not seen since May 2021. The drop in MVRV showed profit-taking activity, but holders were still at a profit.
The weighted sentiment had been firmly bullish during the rally. Over the past week, it fell toward the neutral territory.
Conclusion
The meme coin category has performed remarkably well over the past month, even after accounting for the recent pullback.
How much are 1,10,100 DOGEs worth today?
When Bitcoin began to trend upward again, it was likely that the meme coins and DOGE would follow.
Therefore, investors could assess the markets more closely to find buying opportunities for Dogecoin or other meme coins over the next few weeks.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
Read More: DOGE down 26% from last week’s high – What’s this week’s price prediction?
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