In the past few weeks, Dogecoin (DOGE) has experienced a notable uptrend. However, the momentum is anticipated to have hit a snag due to both technical and fundamental aspects. While the cryptocurrency market gears up for a fresh macro bullish season, concerns are arising over the meme coin industry’s reputation, following the collapse of BALD, which resulted in the loss of over $20 million of users’ liquidity.
Fundamental Concerns and Dogecoin’s Distinction
The collapse of BALD has put a dent in the reputation of meme coins. However, Dogecoin stands out from the questionable meme coins, thanks to its deep liquidity in various trading pairs, including WBNB, WETH, and USDT, across different centralized and decentralized exchanges. Furthermore, the support from Elon Musk’s family of businesses has been a driving force behind Dogecoin’s growth, as the second-largest Proof-of-Work blockchain now boasts a holder base of over 5.8 million users.
Technical Analysis Signals Critical Resistance
A technical analysis provided by Rekt Capital sheds light on Dogecoin’s current price action. The cryptocurrency is currently rejecting a crucial falling resistance level of around $0.077. Historical data reveals that the past three retests of this falling resistance line resulted in nosedives toward the lower borderline of the channel. As a result, if Dogecoin fails to break through this resistance level in the coming weeks, there is a potential risk of a nosedive toward the support level of around $0.055.
Potential Bullish Scenario
On the other hand, a breakout above the current resistance level could pave the way for Dogecoin’s price to surge above 15 cents. This could potentially signal the onset of a macro bull rally, which aligns with the cryptocurrency market’s nearing completion of its four-year cycle, indicating an impending bullish season.
Conclusion
Dogecoin’s recent uptrend faces challenges from both technical and fundamental aspects. The collapse of BALD has raised concerns about the meme coin industry’s reputation, but Dogecoin’s distinctive features and strong liquidity position it as a notable player. Traders and investors are closely monitoring the price action around the critical resistance level at $0.077, which could determine whether the meme lord experiences a nosedive or enters a macro bull rally in the coming weeks.
