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Over the previous 12 days, Dogecoin (DOGE) has endured a pointy decline, shedding greater than 40% of its worth. After buying and selling above $0.48 on December 8, the meme-inspired cryptocurrency briefly sank to $0.2638 by December 20, prompting a wave of hypothesis about its near-term route. The backdrop to this drawdown has been the broader crypto market’s response to US Federal Reserve coverage alerts, with the most recent downturn largely attributed to extra hawkish projections from the Federal Open Market Committee (FOMC).
Whereas the Fed’s December assembly delivered a broadly anticipated 25 foundation level fee minimize, the true shock got here from the revised dot plot, which pointed to fewer future cuts than beforehand anticipated. The market had hoped for 3 fee cuts in 2025, however the FOMC’s steerage now leans towards simply two, suggesting a extra cautious method amid persistent inflationary pressures. This shift in outlook triggered broad-based promoting in risk-on belongings, together with cryptocurrencies. Bitcoin (BTC) dropped under $93,000, and altcoins -20% drawdowns. Inside 24 hours, a staggering $1.17 billion in lengthy positions have been liquidated throughout the crypto markets.
How Low Can Dogecoin Go?
Quite a few distinguished analysts have weighed in on DOGE’s retreat, framing it throughout the context of historic patterns and macro-level drivers. Technical analyst Kevin (@Kev_Capital_TA) highlights the importance of earlier cycles. He notes that, traditionally, Dogecoin has skilled a number of important corrections en path to its cycle tops, stating that the present pullback—much like previous 50% drawdowns—might be a part of a standard bull market construction slightly than an indication of systemic weak spot.
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In keeping with Kevin, “Within the earlier cycle Dogecoin had three separate 50% corrections on the way in which to its cycle prime. If we faucet macro structured assist and the macro golden pocket proper under that may be roughly a forty five% correction from the excessive which primarily based off historic analyses could be simply sufficient for us to renew uptrend. If we lose $0.26 cents on a weekly shut then I might begin to severely fear about this market construction however till then this ought to be handled as a standard bull market pullback.”
Kevin additionally underscores Bitcoin’s affect over the altcoin panorama. As a substitute of focusing solely on DOGE’s standalone chart, he encourages merchants to “not be hyper targeted on altcoin charts” to gauge the market’s macro route. BTC stays the pivotal asset whose value motion typically dictates sentiment throughout the broader crypto house.
Kevin illustrated this level by sharing a BTC/USDT liquidation heatmap, suggesting the market could search to flush out decrease liquidity pockets earlier than any significant rebound. “Let’s go snag all that liquidity at $95K-90K after which we will begin speaking a few bounce. Till then no cause to over analyze. From a elementary standpoint the market is overreacting to what Powell is saying and never truly listening to him. Simply because fee minimize projections,” he writes.
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Balo (@btcbalo), one other crypto analyst, reinforces the significance of the $0.26 degree. He factors out that Dogecoin “nonetheless has a number of days to save lots of the weekly,” indicating {that a} weekly shut above this threshold would keep a structurally sound market framework.
A profitable protection of the $0.26 zone may set the stage for a renewed uptrend, probably concentrating on a return to $0.42—what Balo views as a vital pivot level. Reclaiming $0.42 would, in his phrases, enable DOGE to “teleport” towards the $4 mark, a situation he associates with a full-scale bull run restoration.
A 3rd analyst, CEO (@Investments_CEO), brings a historic perspective, suggesting that DOGE’s present sample aligns with its multi-year cyclical nature. “DOGE seems to be aligning with its typical 3-4 12 months cycle. Zoom out,” he states.
The analyst refers to DOGE’s value motion following its earlier cycle fractal. Again in 2021, Dogecoin skilled its first main run-up approaching its all-time excessive (ATH). After a 50% correction, DOGE resumed its rally, broke by way of the ATH, after which entered value discovery. As talked about earlier, this situation may align with the $0.26 value goal.
At press time, DOGE traded at $0.26919.
Featured picture created with DALL.E, chart from TradingView.com
