Dogecoin Drops 10-20% as Altcoins Bleed to Bitcoin
2min read Dogecoin, the largest meme cryptocurrency by market capitalization, is currently experiencing a selloff as altcoins weaken against Bitcoin. The crypto market is attempting to follow the gold price, but the short-term selloff persists. Dogecoin's price has potentially bottomed, but a retest could occur before a market reversal. The meme coin, with a fully diluted valuation of about $23.5 billion, has been recording a similar fractal pattern to the 2021 and 2017 bull cycles, suggesting the possibility of a major parabolic rally before the end of 2025, especially with the notable rally of the gold price.
The involvement of the government in the crypto market through complex global regulations has significantly impacted the four-year crypto cycle. During the 2021 crypto cycle, most altcoins were in price discovery during the second quarter, with large-cap altcoins reaching their respective peaks. Crypto analyst Benjamin cowen expects the altcoin market to continue to bleed to Bitcoin in the near term, with Bitcoin dominance reaching 66 percent in the coming weeks. This could cause altcoins, including Dogecoin, to drop another 10-20 percent.
In the daily timeframe, the DOGE price has been retesting a crucial logarithmic support level established since 2023. Although DOGE price has signaled a breakout from a year-to-date falling logarithmic trend, the MACD and Relative Strength Index (RSI) have not yet signaled the onset of bullish sentiment. As a result, DOGE’s price is well positioned to drop towards 14 cents again before rebounding towards price discovery soon.
Dogecoin, backed by a robust online community of more than 6 million on-chain holders, has grown to be a major crypto asset. The unwavering support from tech billionaire Elon Musk and his family of unicorns has helped attract more institutional support. Several fund managers have filed with the U.S. SEC to offer spot DOGE ETFs. Meanwhile, Dogecoin’s core developers are seeking to expand the network to cover the DeFi ecosystem. The DeFi ecosystem has helped top-tier layer one chains, such as Solana (SOL), remain competitive in the past two years.
SwallowAcademy's analysis observes that following a brush with close to $0.23 earlier this year, Dogecoin dropped to $0.09 before rising above $0.45. However, the recent selloff has raised concerns among investors. On-chain data has raised red flags across the Dogecoin ecosystem as some whale wallets shed their holdings at an alarming rate. This has contributed to the bearish sentiment surrounding Dogecoin.
The annual "DOGE Day" event, organized by the Dogecoin fan community, has historically coincided with renewed interest and short-term rallies in DOGE prices. However, this year's event has been marred by political tensions and bearish signals from Elon Musk, the face of Dogecoin. Musk's political involvement with the "DOGE" governmental agency and new Trump-imposed tariffs have soured investor sentiment, especially among retail traders. As a result, assets associated with Musk, like tesla stock and DOGE prices, have struggled in recent weeks.
Current price forecasts for DOGE cautiously lean towards a bearish scenario. The DOGE price is currently stuck just below the 5, 8, and 13-day moving averages, forming a resistance zone around $0.156 to $0.157. Failure to reclaim this zone suggests that bulls are losing steam after a mixed performance on "DOGE Day". The relative strength index (RSI) stands at 43.95, hovering just above its 43.06 signal line. While this indicates a slight recovery attempt, the RSI remains in bearish territory below 50, highlighting buyer conviction weaknesses. Under these circumstances, Dogecoin’s price is likely to break below the $0.15 threshold and drop to $0.142, a level last tested during the April 13 sell-off.
The weakening of altcoins against Bitcoin, coupled with the bearish signals from technical indicators and political tensions, has created a challenging environment for Dogecoin. Investors are advised to monitor the situation closely and consider the potential impact of these factors on the cryptocurrency market.
