Dogecoin Price Faces 60% Downside Risk as Rare Bearish Pattern Emerges

Dogecoin’s price has recently been on a sharp downward trend, with the token retreating to a low of $0.019, marking its lowest value since November 7 of the previous year. This represents a significant drop of over 60% from its peak in November. As the price continues to tumble, there are concerns that Dogecoin could face a further decline of up to 60% as a rare and risky technical pattern, known as the “death cross,” is forming.

Dogecoin’s recent price struggles align with the broader challenges faced by many other meme coins. Popular tokens like Shiba Inu, Pepe, and Dogwifhat have also seen their prices plummet, with some falling by over 50%. This widespread downturn in the meme coin sector indicates a broader loss of enthusiasm and confidence in these tokens.

A key factor influencing Dogecoin’s price decline is the reduced influence of Elon Musk, a major supporter of the coin. Musk’s tweets and public endorsement played a significant role in driving Dogecoin’s rise, but recent data shows that his net worth has been significantly impacted this year, with a drop of $103 billion, bringing his total worth to $330 billion. In addition, Musk has faced mounting pressure from political figures, including Donald Trump, which could further affect his association with Dogecoin. As these tensions grow, the potential departure of Musk from leadership positions, including his role in the Department of Government Efficiency (DOGE), could further impact Dogecoin’s psychological value.

A primary concern for Dogecoin holders is the formation of the “death cross” on its price chart. This technical pattern occurs when the 50-day Exponential Moving Average (EMA) crosses below the 200-day EMA, signaling a potential bearish trend. The last time Dogecoin formed this pattern was in July 2024, after which the price dropped by 40%. Currently, Dogecoin is approaching the death cross once again, raising fears that the coin may continue its downward trajectory.

The price also recently dropped below the 61.8% Fibonacci retracement level at $0.2360, which is another key signal that bears are in control of the market. The Fibonacci retracement levels are used by traders to identify areas of support and resistance, and a failure to hold above this level could indicate that the price is heading further downward.

Both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) are showing bearish trends, with the indicators continuing to decline. These technical indicators confirm that sellers are dominating the market, and there is little interest from buyers at the current price levels.

As the bearish trend continues, the next key support level for Dogecoin is at $0.1680, which corresponds to the 78.6% Fibonacci retracement level. If the price breaks below this level, the next potential target for sellers could be as low as $0.08, representing a 60% decline from its current value.

The ongoing downward momentum and the death cross pattern suggest that Dogecoin could experience a dramatic crash. A drop to $0.08 would mark a substantial decline, and the psychological impact of this fall could lead to further panic selling, exacerbating the price decline.

Beyond technical analysis, several external factors are contributing to Dogecoin’s struggles. The overall weakness in the cryptocurrency market is a significant factor, as declines in major cryptocurrencies like Bitcoin and Ethereum often lead to losses in smaller altcoins, including meme coins like Dogecoin. The broader market’s bearish sentiment is weighing heavily on the value of many cryptocurrencies.

Furthermore, the decline in Musk’s influence is another psychological factor that could lead to further losses for Dogecoin. Many investors view Musk’s support as a key driver for the coin’s value, and any change in his involvement could lead to a loss of confidence in the asset. If Musk were to step away from Dogecoin, it could trigger a wave of selling, further driving down the price.

Dogecoin is currently facing a highly uncertain future, with technical indicators, external factors, and the broader market conditions pointing to the possibility of further declines. The formation of the death cross, combined with the failure to hold key Fibonacci levels, suggests that the price could fall to $0.08, representing a 60% drop from its current level.

The weakening influence of Elon Musk, along with the broader downturn in the meme coin market, creates a bearish outlook for Dogecoin in the near future. However, as with any cryptocurrency, the market is highly volatile, and price movements can change rapidly. Investors should remain cautious and monitor both technical and fundamental developments to make informed decisions regarding their Dogecoin holdings.