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The entire cryptocurrency market crashed. However, the market seems to have stabilized for the past couple of days. Most cryptos reached their respective support areas, the fact that makes buying cryptos favorable. Dogecoin is one of those crypto projects that recently reached a strong buy zone. The upside potential can make traders double their investments in such a short period of time. In this Dogecoin price prediction, we analyze DOGE and see whether it is a good idea to buy Doge today.
What is Dogecoin crypto project?
Dogecoin is one of the most well-known cryptocurrencies. The project was established as a cryptocurrency spoof to offset the frenzy around Bitcoin and numerous other new cryptocurrencies with something hilarious, not due to its technological quirks. It is an open-source cryptocurrency used by internet users all around the world. Because the structure is built on Litecoin, all updates will be provided to Dogecoin as well.
Famous entrepreneur Elon Musk helped in pushing Dogecoin to the mainstream, thanks to his funny and controversial tweets. This phase helped the crypto market in general as well, as more people became familiar with cryptocurrencies in general. This “hype” ended soon afterwards, as the market became overbought and collapsed.
What happened to DOGE prices during the Crypto Crash?
The crypto market, in general, started its bearish trend in November 2021. Most tokens reached their peak before starting to adjust lower over a couple of months. Several macro events made this bearish trend worse, as most cryptos are down by an average of 50%.
For Dogecoin specifically, the initial collapse started back on May 10th, 2021. High anticipation of a price increase occurred as Elon Musk took Dogecoin to a mainstream show called SNL. In fact, day traders took advantage weeks prior to the show, and started to dump hours before the show aired. Since then, prices never managed to recover and entered a downtrend, reaching the current price of $0.09.
Dogecoin Price Prediction – Will DOGE Price increase soon?
Dogecoin price reached a strong buy zone delimited by $0.07 and $0.1. Earlier in early February 2021, this area was a strong resistance area, where prices retraced lower every time they touched this zone. There is a strong chance that today, this same zone turns into a strong support. In figure 2 below, we can see this clear resistance turn into a support, despite a brief fakeout that occurred. Prices also readjusted towards the 200-moving average line, which signals an important moment for Dogecoin.
From this strong support area, prices are expected to recover towards the 50% Fibonacci retracement (keeping all other factors constant). This move would yield 35% from the current price. If prices manage to reach the 61.8% Fibonacci level, we can expect a further retracement higher towards the target of $0.18, yielding 100%. However, it is always important to manage our risk, and place SL targets below $0.07 in case the crypto market continues to crash lower, as this will drag DOGE prices lower despite good technicals.
