Dogecoin (DOGE), the meme-based cryptocurrency, has recently experienced a sharp decline in price, falling back after a brief rally to $0.12 last week. Amid this downturn, prominent crypto analyst Ali has highlighted the critical importance of reclaiming the $0.11 price level for Dogecoin to avoid further negative consequences.
In a recent post on Elon Musk’s social media platform X, Ali emphasized that around 60,210 addresses purchased approximately 36.40 billion DOGE tokens at the $0.11 price mark. These addresses are seen as significant support levels, and if Dogecoin remains below $0.11, there is a risk that holders may start selling their assets to mitigate potential losses. This could in turn increase selling pressure and accelerate Dogecoin’s downward trend.
Ali’s analysis underscores that Dogecoin must reclaim the $0.11 level soon to sustain a bullish outlook. Failure to do so could trigger a sell-off as investors may seek to minimize their losses. In the past week, Dogecoin has seen a 10.8% drop in price, and the decline has continued over the past 24 hours, with the asset shedding 4.2% of its value and currently trading around $0.1019.
This price drop has had a direct impact on Dogecoin’s market capitalization, which has fallen from over $17 billion last Thursday to around $14.9 billion today. Additionally, the 24-hour trading volume for Dogecoin has also decreased significantly, from $1.4 billion last Thursday to just above $1 billion.
Despite the ongoing slump, some analysts remain optimistic. Trader Tardigrade, a popular crypto analyst, suggested in a recent post on X that the recent dip in Dogecoin’s price might be a “retest” of its descending trendline following a recent breakout. According to Tardigrade, Dogecoin’s relative strength index (RSI), which measures the magnitude of recent price changes, shows a lower low while DOGE maintains a higher low position. This technical analysis divergence could indicate a potential trend reversal in favor of a bullish move. Tardigrade advised investors to understand technical analysis to avoid being shaken out of the market.