Anticipated Bitcoin Price Correction May Trigger Significant Decline for Dogecoin
Recent analyses indicate that Dogecoin (DOGE) may soon face a substantial price decline, closely tied to the anticipated correction in Bitcoin’s value. According to crypto analyst Ali Martinez, Bitcoin is on the verge of a notable price adjustment. In a post on X (formerly Twitter), Martinez highlighted that the TD Sequential indicator on Bitcoin’s two-month chart has issued a sell signal, suggesting an impending downturn.
Martinez further elaborated that Bitcoin could plummet to as low as $40,600 should it fail to maintain the critical support level of $51,000. Such a drop in Bitcoin’s price is expected to adversely affect Dogecoin, largely due to the strong correlation between the two cryptocurrencies, which is currently rated at 0.9. This figure reflects a potent positive relationship, with both assets often moving in tandem.
Bitcoin’s influence extends throughout the broader cryptocurrency market, where declines in its value create significant ripple effects for other coins, including DOGE. Notably, Dogecoin experienced considerable losses following Bitcoin’s price drop below $50,000 on August 5. Furthermore, historical patterns suggest that Bitcoin tends to experience losses in September, and analysts, including Julio Moreno, Head of Research at CryptoQuant, have expressed concerns regarding potential significant downturns for Bitcoin this month.
Historically, September has not favored Dogecoin, which has registered a loss almost every September since 2014, with the last profitable month occurring in 2021.
Current on-chain metrics regarding Dogecoin present a mixed outlook. While there has been an increase in large transactions, suggesting aggressive accumulation by cryptocurrency whales, there exists a contrasting bearish sentiment; the number of Dogecoin addresses holding profitable positions is declining amid ongoing price weakness, particularly as DOGE remains below the crucial support level of $0.10. Moreover, the adoption rate of Dogecoin appears stagnant, indicating a waning interest from new investors.
As of the latest updates, Dogecoin trades at approximately $0.09, having seen a marginal increase of 1% in the last 24 hours according to data from CoinMarketCap. In conclusion, the prospect of a Bitcoin price correction poses a significant risk to Dogecoin’s value, with historical trends and current market behaviors suggesting a potentially challenging period ahead for the meme coin.
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