8 September 2024
Dogecoin has had its ups and downs in the past seven days: from breaking down below a support at $0.095, to bouncing back up and hitting notable resistance at $0.099. Following this brief rally, Dogecoin experienced another downward shift as the bulls were unable to maintain the momentum.
It dropped once again, breaking through several support levels until bottoming at $0.0899. Since bottoming at $0.0899, DOGE has increased back up by over 7.75% to $0.09687 at the time of writing. Although this price surge might appear relatively modest compared to larger market moves, it is particularly noteworthy given the current situation of the entire crypto market.
Dogecoin Price Movement
The recent uptick in Dogecoin’s price can be largely attributed to a social media post by billionaire Elon Musk on X, formerly known as Twitter. In the post, Musk, the CEO of Tesla and owner of X, shared an AI-generated image that depicted him sitting behind a desk with a placard displaying the letters “D.O.G.E.” The image was accompanied by a caption reading “Department of Government Efficiency.”
While Dogecoin itself was not explicitly mentioned in the post, it appeared to spark excitement among market participants, many of whom are familiar with Musk’s past influence on the meme coin. However, the surge wasn’t up to what many might expect, as it wasn’t enough for a notable price breakout.
Despite the initial surge following Musk’s post, Dogecoin’s price remains below its recent seven-day high. It continues to trade within a relatively tight consolidation range. As of the time of writing, DOGE is valued at $0.0956, situated between a key resistance level of $0.1, which corresponds to the 0.382 Fibonacci retracement level from August 24, and a support level of $0.09, marked by the 0.786 Fibonacci retracement level from the same period.
Slight Ascent
Although there has been a slight upward movement, Dogecoin still faces significant resistance barriers to breaking out of its current range. Going by the Fib retracement indicator, DOGE holders currently have a lot of work to do in inducing buying pressure to push it back up. Interestingly, on-chain data from IntoTheBlock reveals that Dogecoin’s trading volume and overall activity have dropped considerably since the beginning of September.
This reduced activity increases the likelihood of continued price consolidation in the short term. Without a significant influx of trading volume or a major catalyst, Dogecoin may struggle to gain the traction needed to break out of its current range.
However, some on-chain signals like the total exchanges netflow are currently pointing bullish. In the case of a breakout of the consolidation, the first short-term price target is around $0.11. On the other end, a breakdown below the support level could push DOGE lower to retest $0.08.
Featured image from Newsweek, chart from TradingView