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Dogecoin has experienced another decline, falling over 9% in the last 24 hours to trade at $0.201. This memecoin has now dropped 11% over the past week, placing it below a key technical support line. The significant decrease followed the token's drop below its 200-day simple moving average of $0.212, which analysts had noted as a crucial area of resistance.
This downtrend has drawn the attention of traders, and many people now monitor the levels of $0.20 to determine whether Dogecoin will stabilize. Failing to hold this level, the next possible support is to be created around the 50-day simple moving average at $0.194.
The bigger crypto market was equally affected since more than 751 million leveraged positions were closed on exchanges. Among the total liquidations of $1.4 billion, the long positions made up $706 million, meaning that many people considered the price to have increased, but came unprepared when the market experienced a sharp decline in value.
This wave of liquidations happened at a time when the US dollar was gaining power, as the Dollar Index (DXY) increased by more than 3% in the previous month. The increase in the dollar's value usually leads to more restrictive financial conditions, causing investors to exit riskier investments like cryptocurrencies.
Investor sentiment has also felt renewed inflation fears. The Personal Consumption Expenditures (PCE) index core, the most critical indicator of inflation as calculated by the Federal Reserve, rose by 2.8% annually against March, the same result as the previous month. The core rate, which excludes food and energy, rose by 2.6% in June, higher than the 2.5% recorded in May.
The hopes that the Federal Reserve will cut rates in September have failed to materialize, as interest rates remain at 4.25%. This policy attitude has decreased market liquidity, further weakening the demand for risk-associated assets, such as cryptocurrencies. Dogecoin is set to continue its price action based on whether it can retain the levels that have helped it gain. A longer-term recovery above $0.212 can be a sign of new energy.
Also read: Dogecoin News Today: DOGE Price Holds $0.22 as Whale Activity Signals Trend Shift
