The Dogecoin price has struggled in the past few days. After surging to a high of $0.3517 in August, the DOGE coin has declined by more than 20% to the current $0.2746. This brings its total market value to more than $36 billion, making it bigger than Deutsche Bank and Societe Generale.
Why DOGE lost momentum
Dogecoin is a cryptocurrency that is relatively similar to Bitcoin. It is a proof-of-work cryptocurrency that is minted by computers that compute complex mathematical calculations. This method of minting is relatively different from how other tokens like Cardano and Polkadot are mined. The latter are created using a method known as a proof-of-stake, that use a group of validators.
Unlike other popular cryptocurrencies like Ether and Cardano, Dogecoin was created to be an alternative to Bitcoin. Ether and Ada, on the other hand, are tokens for their respective ecosystems.
Dogecoin became incredibly popular because of Elon Musk, the richest man on earth. Early this year, he started promoting the coin, calling it more superior than other digital coins. As a result, more people started buying the cryptocurrency and a large community was created. In most times, the Dogecoin price tends to do well when he makes comments about the coin. Recently, he has been relatively muted about DOGE.
The DOGE price has also retreated because of the overall weakness of cryptocurrencies. Recently, Bitcoin has moved from a high of more than $50,000 to less than $47,000. Other coins have also declined. Therefore, the coin has retreated because of the close correlation that exists among cryptocurrencies.
Dogecoin price prediction
The four-hour chart shows that the Dogecoin price has been in a strong bearish trend lately. Along the way, it has moved below the 38.2% Fibonacci retracement level. It has also fallen below the 25-day and 50-day moving averages. Most notably, the coin has formed a descending triangle pattern.
Therefore, I suspect that the DOGE price will soon break out lower as bears target the next key support level at $0.25. However, a move above the key resistance level at $0.300 will invalidate this view.