The Dogecoin price is bouncing back after crashing to a multi-week low of $0.2153 last week. DOGE is trading at $0.3317, which is 53% above the lowest level last week. It has a market capitalization of more than $44 billion, making it the 6th biggest cryptocurrency in the world.
Dogecoin bounces back
Dogecoin was not left behind in the massive cryptocurrency sell-off that happened last week. The currency fell by as much as 70% from its all-time high of $0.7368 to $0.2165. Today, the coin has joined the rest of the cryptocurrency market by bouncing back. Other popular cryptocurrencies like Bitcoin, Ripple, Binance Coin and Polkadot have also jumped by double digits. In total, the industry’s market capitalization has jumped by more than 8%, according to data compiled by CoinMarketCap.
Dogecoin price is rising because of two primary reasons. First, the rally is part of the overall cryptocurrencies gains. As last week revealed, digital currencies are highly correlated assets that tend to move in the same direction. In most cases, they tend to follow Bitcoin’s lead.
Second, DOGE is rising as investors rush to buy the dips. Historically, even during a bearish run, an asset’s price tends to bounce back periodically.
Finally, it is rising after Elon Musk expressed his support for the digital currency. In a Tweet, the Tesla boss said that he had not and was not considering selling Dogecoin. Most Dogecoin buyersdo so because of Musk’s impact since he is a pioneer who has led successful companies like Tesla and SpaceX. He is also the second richest person on earth. So, what next for DOGE price?
Dogecoin price prediction
The four-hour chart shows that the Dogecoin price has bounced back. It is trading at $0.3317 and is 53% above the lowest level during the weekend. The currency is also slightly above the 61.8% Fibonacci retracement level. It is also between the descending channel that is shown in orange below. Also, it is below the dynamic resistance offered by the 50-day, 100-day, and 200-day exponential moving averages (EMA).
Therefore, in my view, DOGE is still in a bearish trend even though I expect it to retest the upper side of the channel at around $0.40. If this happens, it will then resume the downward trend and possibly retest the lowest level last week. The bearish thesis will be invalidated if the price moves above the upper side of the channel at $0.40.