The price of Dogecoin crashed hard in 2022 as the hype surrounding the coin eased. The coin, which came out of nowhere to become the top ten cryptocurrencies, has crashed by 63% this year alone, giving it a market capitalization of over $8 billion. In this article, we will explain why the price of DOGE fell and whether you should buy a dip.
Why has DOGE crashed?
Dogecoin is a cryptocurrency that was launched in 2014 to become a viable alternative to Bitcoin and Litecoin. For years, it was an unknown cryptocurrency whose price went sideways.
This changed in 2021 after Elon Musk, the world’s richest man, became the biggest promoter. Due to his influence in the financial markets, Musk managed to push the coin to an all-time high of $0.7532 in May 2021.
Since then, the price of Dogecoin has been in a strong bearish trend as demand subsides. Indeed, its price has fallen by more than 90% from its all-time highs.
First, the selloff coincided with the performance of other cryptocurrencies. Indeed, top cryptocurrencies such as BTC and ETH are down by over 50% this year. The total market cap of all cryptocurrencies has fallen to around $1 trillion.
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Second, the hype surrounding Elon Musk has faded this year. For one, he hasn’t sent as many tweets on Dogecoin as before. Even as they tweet, the reaction among market participants has been relatively muted of late.
Third, the hawkish Federal Reserve has caused the price of Dogecoin to drop. The Federal Reserve has raised interest rates by 225 basis points this year to deal with rising inflation. It has also indicated that it will continue hiking in the coming months.
Therefore, Dogecoin has crashed as riskier assets collapse during periods of high interest rates. In fact, stocks and major commodities like gold and silver also declined.
Dogecoin Price Prediction
The weekly chart shows that DOGE price has been in a strong bearish trend lately. Additionally, the 50-week and 100-week moving averages have formed a bearish crossover, which is a bit risky. At the same time, the Awesome Oscillator has remained below the neutral point.
especially. Dogecoin has also formed a descending wedge pattern, which is usually a bullish signal. Therefore, there is a possibility that DOGE will resume the bullish trend once the wedge reaches its confluence zone. It is likely to decline towards the key $0.020 support level before rallying.