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Over the previous 12 days, Dogecoin (DOGE) has endured a pointy decline, shedding greater than 40% of its worth. After buying and selling above $0.48 on December 8, the meme-inspired cryptocurrency briefly sank to $0.2638 by December 20, prompting a wave of hypothesis about its near-term path. The backdrop to this drawdown has been the broader crypto market’s response to US Federal Reserve coverage alerts, with the most recent downturn largely attributed to extra hawkish projections from the Federal Open Market Committee (FOMC).
Whereas the Fed’s December assembly delivered a extensively anticipated 25 foundation level fee reduce, the actual shock got here from the revised dot plot, which pointed to fewer future cuts than beforehand anticipated. The market had hoped for 3 fee cuts in 2025, however the FOMC’s steering now leans towards simply two, suggesting a extra cautious strategy amid persistent inflationary pressures. This shift in outlook triggered broad-based promoting in risk-on belongings, together with cryptocurrencies. Bitcoin (BTC) dropped beneath $93,000, and altcoins -20% drawdowns. Inside 24 hours, a staggering $1.17 billion in lengthy positions had been liquidated throughout the crypto markets.
How Low Can Dogecoin Go?
A lot of distinguished analysts have weighed in on DOGE’s retreat, framing it inside the context of historic patterns and macro-level drivers. Technical analyst Kevin (@Kev_Capital_TA) highlights the importance of earlier cycles. He notes that, traditionally, Dogecoin has skilled a number of vital corrections en path to its cycle tops, stating that the present pullback—much like previous 50% drawdowns—could possibly be a part of a standard bull market construction somewhat than an indication of systemic weak spot.
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In response to Kevin, “Within the earlier cycle Dogecoin had three separate 50% corrections on the way in which to its cycle prime. If we faucet macro structured assist and the macro golden pocket proper beneath that may be roughly a forty five% correction from the excessive which based mostly off historic analyses could be simply sufficient for us to renew uptrend. If we lose $0.26 cents on a weekly shut then I’d begin to critically fear about this market construction however till then this needs to be handled as a standard bull market pullback.”
Kevin additionally underscores Bitcoin’s affect over the altcoin panorama. As a substitute of focusing solely on DOGE’s standalone chart, he encourages merchants to “not be hyper centered on altcoin charts” to gauge the market’s macro path. BTC stays the pivotal asset whose worth motion usually dictates sentiment throughout the broader crypto house.
Kevin illustrated this level by sharing a BTC/USDT liquidation heatmap, suggesting the market might search to flush out decrease liquidity pockets earlier than any significant rebound. “Let’s go snag all that liquidity at $95K-90K after which we will begin speaking a couple of bounce. Till then no motive to over analyze. From a basic standpoint the market is overreacting to what Powell is saying and never really listening to him. Simply because fee reduce projections,” he writes.
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Balo (@btcbalo), one other crypto analyst, reinforces the significance of the $0.26 degree. He factors out that Dogecoin “nonetheless has a couple of days to save lots of the weekly,” indicating {that a} weekly shut above this threshold would keep a structurally sound market framework.
A profitable protection of the $0.26 zone may set the stage for a renewed uptrend, doubtlessly focusing on a return to $0.42—what Balo views as a vital pivot level. Reclaiming $0.42 would, in his phrases, permit DOGE to “teleport” towards the $4 mark, a situation he associates with a full-scale bull run restoration.
A 3rd analyst, CEO (@Investments_CEO), brings a historic perspective, suggesting that DOGE’s present sample aligns with its multi-year cyclical nature. “DOGE seems to be aligning with its typical 3-4 yr cycle. Zoom out,” he states.
The analyst refers to DOGE’s worth motion following its earlier cycle fractal. Again in 2021, Dogecoin skilled its first main run-up approaching its all-time excessive (ATH). After a 50% correction, DOGE resumed its rally, broke by way of the ATH, after which entered worth discovery. As talked about earlier, this situation may align with the $0.26 worth goal.
At press time, DOGE traded at $0.26919.
Featured picture created with DALL.E, chart from TradingView.com
