TLDR
- Dogecoin price has fallen 30% from its July peak of $0.28 to test the $0.19 support level
- A golden cross between 20/200-day moving averages still indicates a long-term bullish trend
- Momentum indicators like RSI and MACD show cooling off after July’s rally
- Majority of traders on Binance and OKX maintain long positions despite the pullback
- Macroeconomic factors including new US import taxes are pressuring risk assets
Dogecoin, the popular meme cryptocurrency, has experienced a sharp correction over the past two weeks. After spending most of July in positive territory and reaching a five-month high of $0.28 on July 21, DOGE has retreated by almost 30% to test the key support level at $0.19.
This pullback has raised questions among traders about whether this support zone will hold and potentially serve as a launching pad for the next rally, or if further declines toward $0.15 might be in store.
The recent selling pressure has pushed Dogecoin below both its 50-day exponential moving average (EMA) at $0.206 and its 200-day EMA at $0.207. However, buyers have so far defended the crucial $0.19 support level, suggesting that dip buyers remain active in the market.
Should DOGE break below this support on a decisive daily close with substantial volume, bears could target the next major support zones at $0.17 and $0.15. These levels represent potential discounts of 12% to 24% from current prices.
On the other hand, a successful defense of the $0.19 level would indicate that sellers have exhausted their supply. This could open the door for a quick rebound toward the 20-day EMA around $0.22.
Technical Indicators Point to Cooling Momentum
From a long-term technical perspective, Dogecoin remains in a bullish structure thanks to a golden cross between the 20-day and 200-day moving averages that formed in late July. This pattern typically suggests that long-term bulls remain in control as long as price stays above the slower-moving average.
However, shorter-term momentum indicators paint a different picture. The Relative Strength Index (RSI) has dropped from an overheated reading above 80 to below 50, moving into bearish territory. This decline signals that market momentum has cooled off considerably in recent weeks.
The Moving Average Convergence Divergence (MACD) has also turned bearish, confirming the loss of bullish momentum that drove July’s rally.
If DOGE manages to hold above the key $0.19 support while these technical indicators reset from overheated conditions, the most likely scenario could be a rebound toward the $0.22-$0.24 range. A decisive break above $0.24 resistance might then set the stage for a run toward the $0.30 psychological barrier.
Macro Factors and Trader Sentiment
The broader market context has contributed to Dogecoin’s recent weakness. Several macroeconomic developments have pressured risk assets, including cryptocurrencies. President Trump has implemented new import taxes ranging from 10% to 41% on goods from various countries including Canada, India, Brazil, and Taiwan.
Additionally, the US Federal Reserve maintained steady policy rates in its latest meeting, with expectations that this stance will continue in the near term. These factors have pushed investors toward safer assets, contributing to the decline in cryptocurrencies like DOGE.
Data from Coinglass shows that aggregate Dogecoin futures volume decreased by 37% to $4 billion over a 24-hour period. However, open interest remained stable at around $3 billion, suggesting traders are maintaining their positions despite the price drop.
Particularly noteworthy is the long/short ratio on major exchanges. On Binance, long positions outnumbered shorts by 3:1, while OKX showed an even stronger 3.6 ratio. These figures suggest an underlying bullish sentiment persists among larger market participants.
While short-term momentum traders have pulled back, institutional players appear to be betting on a potential rebound. If macroeconomic conditions improve and Dogecoin holds the $0.19 support level, the accumulated buying interest could drive prices higher in the coming weeks.
The next few days will likely be critical for determining whether Dogecoin can defend its current support and stage a recovery, or if further downside is in store for the popular cryptocurrency.
