The Dogecoin price is not seeing any floor as the overall cryptocurrency sell-off gains steam. DOGE has dropped in the past nine consecutive days and is down to the lowest level since May 20th. Its market capitalization has fallen to more than $30 billion, down by 70% from its all-time high.
China crackdown on cryptocurrencies
There are several reasons why the Dogecoin price is falling. First, as I reported earlier today, China has expanded its crackdown on cryptocurrencies. The country has already barred its financial companies like banks from dealing with the coins. That has made it almost impossible for individuals and companies from buying and selling the currencies. Today, DOGE and other coins are falling as investors react to news that the country has intensified its crackdown on mining.
Second, Dogecoin is falling as demand for the coin declines. A look at volume data compiled by CoinMarketCap shows that the overall volume of the coin that is traded in leading exchanges has dropped recently. The total volume of Dogecoin traded on June 20th declined to $1.96 billion down from more than $20 billion on the same day in May. This drop is in line with what has happened across other cryptocurrencies in the past few months.
Finally, Dogecoin has declined because of the hawkish Federal Reserve. In its statement last week, the bank signaled that it will hike interest rates in 2023, earlier than the previous estimate of 2024. As such, investors will focus on the upcoming testimony by Jerome Powell to see whether he will change his tone on this.
It is also worth noting that the overall price action of cryptocurrencies is similar to what Justin Sun of Tron predicted last month. He predicted that cryptocurrencies will go through consolidation this month and then jump in July.
Dogecoin price prediction
The daily chart is not looking good. As you can see above, DOGE has dropped in the past several straight days. Worse, the size of the daily decline has increased, which is a sign that bears are in control. The coin has also moved below the 25-day and 50-day moving averages. It is also slightly above the important support level at $0.1958, which was the lowest level on May 19.
Therefore, any move below this level will signal that bears have prevailed and that the price will likely keep dropping. If this happens, the next key level to watch is $0.1654, which is about 25% below the current level. Nonetheless, a move above the 50% retracement at $0.380 will invalidate the bearish view.