Dogecoin Plunges, ETF Hopes Soar Amid Regulatory Clarity

Dogecoin (DOGE) has experienced a significant price decline, dropping below the $0.20 support level and currently trading at $0.185. This represents a 10% decrease in the last 24 hours and a more substantial 26% drop over the past seven days.

The U.S. Securities and Exchange Commission (SEC) has provided clarity on the regulatory status of meme coins, declaring that they do not fall under the category of securities as defined by federal securities laws. This regulatory clarity has had an interesting effect on the potential for a Dogecoin ETF, with the probability of a DOGE ETF receiving approval by July 31 reaching record levels according to data from Polymarket. An ETF approval could potentially drive the price toward higher levels.

Technical analysis suggests that $DOGE is showing strong bullish potential as it approaches a key reversal zone. The price has reached the $0.16896 support, aligning with a potential Cup & Handle formation. A breakout above $0.29124 could confirm a rally toward new highs, with a long-term target near $0.50.

However, the current market conditions continue to present challenges for DOGE holders. The 30-day Market Value to Realized Value (MVRV) ratio has entered negative territory, indicating that traders are currently facing unrealized losses of approximately 20%.

Technical indicators are showing concerning signals for the short term. The Relative Strength Index (RSI) on the daily chart has dropped to 23, reaching levels not seen since the banking crisis of March 2023. The price decline has broken through several key support levels, raising questions about potential further downside. Market analysts are now watching the $0.12 level as a crucial support zone, with some suggesting that a break below this point could lead to a test of lower levels.

Trading volume has increased during this period of price decline, indicating strong selling pressure across the market. This increased activity suggests that traders are actively participating in the market movements, though primarily on the selling side. A technical pattern that has caught the attention of analysts is the potential formation of a Cup & Handle pattern near the $0.16896 level. This pattern, if confirmed, could indicate a potential reversal point for the price action.