Dogecoin (DOGE), the popular meme-coin, has experienced an impressive 94% recovery from its low of $0.0491 in June 2022, currently trading at around $0.0942. Despite this significant rebound, the cryptocurrency is still 88% below its all-time high of $0.76 set in May 2021. The DO...
Dogecoin (DOGE), the popular meme-coin, has experienced an impressive 94% recovery from its low of $0.0491 in June 2022, currently trading at around $0.0942. Despite this significant rebound, the cryptocurrency is still 88% below its all-time high of $0.76 set in May 2021.
The DOGE/USD pair has yet to establish a decisive bullish reversal on longer timeframes, leaving investors wondering whether a more substantial recovery is on the horizon.
Dogecoin’s rise in 2021 was primarily fueled by Tesla CEO Elon Musk’s vocal support. However, the DOGE/USD price peaked after Musk referred to the cryptocurrency as a “hustle” during his appearance on Saturday Night Live in May 2021.
The impact of Musk’s comment was amplified by the prospect of the Fed’s tightening, which eventually led to actual interest rate cuts in 2022 and 2023.
Furthermore, DOGE was dealt a big blow by the collapse of several major crypto firms including Terra (LUNA), Three Arrow Capital, and FTX. These events contributed to the selloff of DOGE, sending the cryptocurrency into a prolonged bearish cycle.
In October 2022, Dogecoin’s price doubled, coinciding with Musk’s controversial takeover of Twitter. Investors hoped that DOGE would become the social media platform’s official payment token.
Despite Musk temporarily replacing Twitter’s bluebird logo with Dogecoin’s Shiba Inu mascot earlier this month, that fueled a 40% rally in DOGE’s price, the platform has yet to implement DOGE payments, leaving the cryptocurrency’s future uncertain.
To reach its all-time high again, Dogecoin would need to rise by 700%, which may only happen if it sees broader adoption, such as becoming a payment option on Twitter.
From a technical perspective, Dogecoin’s bullish reversal will depend on maintaining support above two key weekly exponential moving averages (EMA) – the 50-week EMA at $0.0917 and the 200-week EMA at $0.0895.
While a similar 30,000% price rally like the one seen in 2020-2021 may not occur in 2023, positive catalysts such as a reversal of the Fed’s interest rate policy or the addition of Dogecoin payments on Twitter could propel DOGE toward its record high of $0.76 this year.
However, if Dogecoin fails to hold its key EMA levels, it risks triggering a bearish continuation pattern known as the ascending triangle. This would indicate a potential drop in price, with year-end price targets falling between $0.0363 and $0.0469, representing a 45-60% decrease from current levels.