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Dogecoin (DOGE) is sitting in a crucial position, and losing it could cause considerable losses to investors.
The broader market is becoming increasingly bearish, so DOGE may find it hard to prevent a drawdown.
Dogecoin Investors May Witness Losses
At the time of writing, Dogecoin’s price is trading above a crucial support loss, which could result in a potential death cross. The crypto market is cooling down from the recent rally, and this impact can be seen across digital assets.
The Moving Average Convergence Divergence hints at the same. (MACD) is a trend-following momentum indicator that identifies trend changes by comparing two moving averages of an asset’s price.
The indicator observes the formation of a potential bearish crossover with the green bars on the histogram declining. This suggests that bullishness is receding even though the past week was the first instance of optimism in the past month.
Generally, when the market does not support a recovery, investors tend to be the saviors of an asset. However, this is not the case with DOGE since investors will likely opt to step back.
This is because, as noted on the Global In/Out of the Money (GIOM) indicator, about 12.48 billion DOGE bought between $0.13 and $0.15 will lose profitability if Dogecoin’s price falls. This $1.8 billion worth of supply becoming turn loss-bearing will potentially incentivize investors to HODL until gains are visible.
Read More: Dogecoin (DOGE) Price Prediction 2024/2025/2030
Thus, this would affect their participation, which in turn will slow down any chances of recovery Dogecoin may have.
DOGE Price Prediction: The Last Ray of Support
Trading at $0.14, Dogecoin’s price is sitting above a key support level, which has been tested multiple times in the past. Falling through this crucial support in the past has resulted in a drawdown to the $0.12 support level.
The Exponential Moving Averages (EMA) are forming a potential death cross. A death cross is a bearish technical pattern where a short-term 50-day EMA crosses below a long-term 200-day EMA. This indicates a potential downtrend continuation.
Read More: How To Buy Dogecoin (DOGE) and Everything You Need To Know
Consequently, DOGE could fall to $0.12 support and, in the process, result in $1.8 billion worth of losses as well.
However, if Dogecoin’s price returns from the $0.14 support, it could note a recovery beyond $0.15. This would invalidate the bearish thesis and make the 12.48 billion DOGE profitable again.