Dogecoin, a popular digital asset, has been experiencing significant losses in recent weeks. Its price has dropped by 18.65% in the month to date and more than 13% in the year to date. Additionally, Dogecoin has seen a decline of over 5% in the past week due to a sluggish market. As a result of these losses, Dogecoin’s total market cap has fallen to $8.59 billion, placing it in the 8th position after Solana. Furthermore, the volume of Dogecoin traded has decreased by more than 18% in the same period.
The decline in Dogecoin’s price can be attributed to several factors, including weak market sentiment, a decrease in risk appetite, and macroeconomic concerns. The overall cryptocurrency market cap has also been on a downward trend, reaching $1.03 trillion, its lowest level since June. Additionally, the total crypto market volume has dropped by over 18% in the last 24 hours.
Traders have been cautious in recent weeks due to global economic uncertainties. Recent data reveals that the UK economy contracted by 0.5% in July, surpassing the expected 0.2% decline. In response, the Bank of England (BoE) is planning to raise its interest rates by 0.25% to 5.5% in its upcoming meeting as a measure to address the high inflation rates. Similarly, the European Central Bank (ECB) is expected to increase its interest rates by 0.25 basis points to 4.00% in its upcoming meeting to combat persistently high inflation.
Investors are eagerly awaiting the release of key economic data, such as the Consumer Price Index (CPI) for August and the Producer Price Index (PPI). These data will guide the Federal Reserve in making decisions regarding its monetary policy. Stronger-than-expected economic data released last week has raised concerns about additional interest rate hikes by the central bank this year.
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The US Federal Reserve’s two-day policy meeting scheduled for September 19th and 20th will be closely watched by investors. They will be seeking clues about the bank’s future interest rate decisions. According to statistics from the CME FedWatch Tool, there is a 93% probability of the Fed pausing its interest rate hike campaign in the September meeting. However, there are high expectations for another rate hike in November.
In terms of the Dogecoin price outlook, the daily chart indicates a strong bearish trend over the past few weeks. The digital asset has failed to overcome the major hurdle at the 50-day Exponential Moving Average (EMA). Dogecoin remains below both the 50-day and 200-day EMAs, as well as the 50-day and 100-day Simple Moving Averages (SMAs). Additionally, its Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicator are below the signal line.
Considering the global macroeconomic concerns, it is likely that the Dogecoin price will continue to be bearish in the immediate term. If it falls below the immediate support level at $0.05930, there is a possibility that the price may decline further and find support at $0.05575. However, if Dogecoin manages to surpass the major hurdle at the 50-day EMA at $0.06615, it could open the door for further gains and invalidate the bearish outlook.
In conclusion, Dogecoin has experienced significant losses recently due to weak market sentiment, a decline in risk appetite, and macroeconomic concerns. The overall cryptocurrency market has also been on a downward trend. Investors are closely monitoring economic data and upcoming central bank meetings for guidance on future monetary policy decisions. The immediate outlook for Dogecoin remains bearish, but a break above key resistance levels could change the narrative.
