Dogecoin [DOGE] Returns to Key Support, Dips Slightly Below

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In early September, Dogecoin spiked from strong support at $0.0022 to highs near $0.007. A bearish divergence between the price and RSI followed, and the price action of Doge has been on a prolonged decline since.

The past few days price action has brought the price of Dogecoin back to the support level which it spiked from. The current price is trading around $0.0023 after pricing in a low yesterday around $0.00205.

The low Dogecoin formed yesterday corresponded with the decline taking place in the rest of the market and brought the price below the support level. Similar to the rest of the cryptocurrency market after yesterdays decline, Doge’s price action has risen back up and is around the point of support.

With yesterdays price action not meeting much-buying pressure at the previous support level and easily dropping below, it is likely we will see a return below these levels. At the moment, most altcoins are following the direction of the overall market and Dogecoin does not seem to be any different.

Dogecoin Daily Chart – Source: Tradingview.com

The market leader Bitcoin which represents over 53% of the market cap formed its 2018 low yesterday and had been mostly dictating the direction of the market. The 2018 low was formed just under $4200 but has since recovered to trading at $4400 currently. With the extremely bearish movements being seen recently, another sharp drop is a strong possibility, and a movement below $4000 in Bitcoin may result in sharp drops in the majority of altcoins including Dogecoin.

Bitcoin Daily Chart – Source: Tradingview.com

Key Takeaways:

  • Dogecoin continues its prolonged downward spiral and drops below key support yesterday.
  • Price action has since recovered in Dogecoin and seems to be moving with the market.
  • Strong possibility of another drop in market leader Bitcoin. A move below $4000 in bitcoin would likely result in a sharp sell-off in Dogecoin.
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