Dogecoin Reaches the Spot Where Its Past 887% Rally Began Again... 'This' Crumbles, It's All for Naught

▲ Dogecoin (DOGE)/AI Generated Image

Dogecoin (DOGE) is returning to the long-term accumulation zone where it initiated past surges of 224% and 887%, but if the $0.05 level breaks, further declines will be hard to avoid.

According to FXEmpire on August 4 (local time), DOGE's price is around $0.07, down approximately 85% from the $0.48 recorded at the end of 2024. All major weekly exponential moving averages are also below the current price, indicating that the mid-to-long-term trend is still dominated by selling pressure.

DOGE is approaching the $0.048 to $0.063 range, which served as a major accumulation zone from 2022 to early 2024. This range is approximately 30% lower than the price on August 4. After confirming the same support zone in June 2022, DOGE rebounded by about 224%. After falling back to the same zone again, it surged by 887% towards $0.48.

The possibility that DOGE might retest the long-term support zone around the November US midterm elections has also been raised. The weekly Relative Strength Index (RSI) is at 32.7, close to the oversold threshold of 30. If a rebound is successful, the first target is the 20-week exponential moving average around $0.088. If that price is breached, the next resistance zone is considered to be between $0.11 and $0.12.

A variable that could shake the rebound scenario is monetary tightening in Japan and the United States. The Bank of Japan (BOJ) raised its policy rate by 0.25 percentage points in June, then froze it at 1% in July. However, BOJ board member Hajime Takata suggested it should be immediately raised to 1.25%. Japan's 2-year government bond yield rose to 1.51%, and the probability of a September rate hike increased from 20% a week ago to approximately 40%.

The probability of the Federal Reserve (Fed) raising interest rates by 0.25 percentage points in September also increased from 55.8% to approximately 62.5%. If both countries engage in simultaneous tightening, yen appreciation and the liquidation of yen carry trades could accelerate. During the liquidation in August 2024, the Nikkei index fell by about 20%, and the S&P 500 dropped by over 5%. Bitcoin (BTC) also fell by about 15%. The volume of leveraged trades affected at that time was estimated at approximately 40 trillion yen, or $250 billion. If DOGE closes below $0.05 on a weekly basis, the rebound outlook based on the long-term accumulation zone will be invalidated.

[Article Key Summary]

-DOGE is approaching the $0.048 to $0.063 range, where it initiated past surges of 224% and 887%.

-If a rebound is successful, $0.088 is the first target, followed by $0.11 to $0.12 as resistance levels.

-If the weekly closing price falls below $0.05, the rebound outlook based on the accumulation zone will be invalidated.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*