The Dogecoin (DOGE) cryptocurrency, which runs the Dogecoin crypto payments blockchain inspired by the dog meme, suffered a significant drop on Thursday, leading to a further deterioration in price predictions. The coin, which had been experiencing an upward trend since December 2022, took a turn for the worse on Thursday as a result of a wider crypto market sell-off caused by a combination of worries about the Federal Reserve’s tightening policies and the SEC’s efforts to regulate US-based crypto staking services.
On Friday, the DOGE/USD pair stabilized slightly above its 50-Day Simple Moving Average (SMA) near the $0.08 mark, after dropping by more than 10% during the week and nearly 18% compared to last Saturday’s high of $0.10. The bearish market was able to reach its temporary target of testing the $0.079 level, which was previously a resistance but has now become a support, indicating that there may be some stabilization in the Dogecoin market in the coming days.
What’s Next for the Cryptocurrency?
The recent decline in Dogecoin’s value has resulted in a gain of less than 20% on the year, leading traders to question if the coin has truly broken away from its bear market that lasted from the latter half of 2021 through most of 2022. Despite this, Dogecoin is still up by a remarkable 60% from its 2021 low below $0.05.
The hope that entrepreneur and billionaire Elon Musk, who recently took over Twitter, might include Dogecoin in a future payment system on the platform is keeping prices afloat compared to the lows in 2022. However, declining engagement on Twitter, as evidenced by a decrease in engagement on Elon Musk’s posts, has led some analysts to worry that Twitter might not be the solution to bring Dogecoin back to its all-time highs.
Musk seems to be becoming increasingly frustrated with the declining engagement on Twitter – a recent study reported that US usage has decreased by 9% since Musk took over, with many Democrats leaving the platform due to Musk’s apparent right-wing political views. Musk has previously stated that Twitter is on the road to bankruptcy, and unless the situation improves for the social media platform, Dogecoin investors should be cautious.
In the short term, it seems more likely that Dogecoin will retest the $0.079 support level and potentially drop towards the 200-Day SMA at $0.077, rather than recover back to its recent highs of $0.10. If the US CPI data released next week is softer than expected, it could boost sentiment slightly. However, in the near future, Dogecoin is expected to remain within its multi-month range of $0.07 to $0.11.
Alternative Cryptocurrencies to Consider
Given Dogecoin’s uncertain short-term outlook, traders seeking quick gains may want to consider other high-potential tokens offered by upcoming crypto projects during pre-sale. The CryptoNews Industry Talk team has evaluated some of the top contenders in this list of the top 15 cryptocurrencies for 2023.