The Dogecoin price is eerily calm as traders wait for a new catalyst. DOGE is trading at $0.3180, where it has been in the past few days. It has a market capitalization of more than $41 billion and is the sixth-largest cryptocurrency project in the world.
Will the Fed be the catalyst?
The Dogecoin and other cryptocurrency prices are in a tight range after bouncing back on Monday. Bitcoin remains at the $40,000 mark while Ether is at $2,500. This is partly because investors are waiting for a catalyst. Some of the recent catalysts like the decision by MicroStrategy to buy more BTC worth more than $1 billion have all fallen flat.
Therefore, barring any statements from people like Elon Musk and other influential individuals, the next key catalyst will be the Federal Reserve. The Fed will deliver its interest rate decision later today.
All analysts believe that the Fed will not tweak its interest rate decision and its quantitative easing policy today. Still, like I wrote on Monday, the keyword to watch will be “transitory.” If the bank excludes that term from its statement, it will send a sign that it is shifting its tone as the economy recovers. On the other hand, if it leaves the statement intact, it will be a dovish tone. Investors will also watch the Fed’s dot plot.
The bond market points to a status quo. For one, the 10-year yield has declined to 1.42%, which is substantially lower than this year’s high of 1.76%. Further, data have pointed to the fact that this recovery is transitory. For example, after surging in March, retail sales have dropped in the past two consecutive months. And in May, the sales declined below 1%.
So, how will the Dogecoin price react to the Fed decision. In my view, if the Fed holds steady, I expect that Doge and other cryptocurrencies will rise since it will signal an easy money policy for longer. But we cannot also rule out a decline since this has already been priced in. However, if the Fed shifts tone, I expect that it will decline sharply and then bounce back.
Dogecoin price prediction
The four-hour chart shows that the DOGE price has been in a tight range recently. This is evidenced by the fact that the coin has remained along the 25-day and 50-day exponential moving averages (EMA). At the same time, the Average True Range (ATR) has declined, signaling that volatility has declined.
Like I wrote a while back, low volatility is usually a sign of calm before the storm. As such, the coin could experience major moves in the near term. If this happens, the support and resistance levels will be $0.2490 and $0.4468.