Dogecoin ($DOGE) Drops 10% Amid Crypto Downtrend, Musk Endorsement Hopes

Memecoins, including Dogecoin ($DOGE), Shiba Inu ($SHIB), and Pepe ($PEPE), have faced significant challenges during the current crypto downtrend. Despite their large market capitalizations, the question remains whether these memecoins are on a path to zero or if a renewed bull market could propel them to new heights.

Memecoins are particularly vulnerable to market fluctuations. While they can experience rapid gains during a bull market, they are also susceptible to substantial losses. Unlike traditional cryptocurrencies, memecoins often lack any underlying utility or backing, making them highly speculative investments. Among the three memecoins analyzed, only $DOGE and $SHIB claim to offer some utility, though these use cases appear to be limited and not particularly robust.

Dogecoin, the most well-known memecoin, has garnered significant attention due to its association with Elon Musk. There is speculation that Musk might integrate Dogecoin as a form of payment in one of his ventures, such as the X platform or another company. However, with a market capitalization of $25.8 billion, some investors question whether Dogecoin is overvalued. The future of Dogecoin's value will depend on whether Musk's potential endorsement materializes and if the market sentiment shifts in its favor.

From a technical analysis perspective, Dogecoin's price has reached a critical support level at the 0.786 Fibonacci retracement. This level could provide a bounce, but if the market cap continues to decline, the next support levels are at $0.14 and $0.10. The 200-day moving average has been breached, indicating that a significant turnaround in market sentiment is needed for Dogecoin to recover.

Shiba Inu, another prominent memecoin, claims to have a small ecosystem that offers some utility. However, this ecosystem does not appear to be groundbreaking. With a market capitalization of $7.3 billion, Shiba Inu's future remains uncertain. Currently, the price is hovering just above a critical support level at $0.0000125. If this support level fails, the market cap could continue to decline. However, a bounce from this level is also a possibility, depending on market conditions.

Pepe, the third-largest memecoin by market