The first meme for some time now, the canine-themed digital token has enjoyed a meteoric rise in popularity since its creation as individuals and businesses have fallen in love with the digital token, making its value soar to a record level.
But the second quarter of last year and the early days of this year point to a grim prospect for the popular meme coin, with many industry insiders pointing to its direct rival, Shiba Inu, as the reason for the slump.
Shiba Inu, in 2021, took the shine off Dogecoin as interest in it continued to go up despite the intimidating popularity of its rival. But regardless, the world’s first meme digital currency is in a gradual and steep decline.
Is Dogecoin’s Crash Imminent?
The price of Dogecoin has dropped by almost 80% from its all-time high since the second half of last year. It is currently trading at $0.126. The downward spiral is akin to the previous crashes in the bear market, indicating that DOGE was oversold at the particular period.
The present level of trading for Dogecoin is critical for its price stability because it is the line that analysts regard as the defensive line. According to the Volume Profile Indicator, any trade volume under the $0.126 level is unacceptable; some say it is non-existent.
As such, any further move will result in a rapid downward spiral with little resistance from holders enough to salvage the situation.
A crash is likely to happen at this juncture, which will see the DOGE return to the stage of support at $0.085 – a point where investors might try to hodle to form a shield. The canine crypto will slide further down to the $0.063 support mark if the selling pressure becomes intense.
Another likely scenario is when Dogecoin retests the $0.063 level; it would mean a 50% decline from its current standing and a 90% backward movement from its previous peak.
DOGE/USDT 1-day chart. Source: TradingView
The recent spike in funding rates lends real credence to the DOGE price slump and suggests that it might have been the essential factor for its occurrence. But then, some experts believe that a moderate funding rate could indicate a balanced move. Highly positive funding could mean greed or speculative hodling due to price rises.
In a more technical term, the potential crash of Dogecoin is reasonable, but it requires a catalyst to pull the trigger and cause it to overstep the price barriers. The key here is the ongoing conflict between Russia and Ukraine.
The rumors of an impending nuclear war, reportedly by Russia, are also another trigger for an impending 50% crash in the price of the DOGE.
Coincidentally, since Russia is targeting the nuclear weapon site belonging to Ukraine with bombs and shelling, it is sending shock waves across the financial markets worldwide, with the crypto market not excluded. Investors will likely be in a panic mode.