Dogecoin Tests 200 EMA as U.S. Dollar Index Soars
1min read Dogecoin (DOGE) has reached a critical support level at the 200 Exponential Moving Average (EMA), a historically significant zone for trend reversals, following a prolonged decline. This level has previously served as a crucial turning point for DOGE, making it a pivotal area where a significant rebound or further breakdown could occur.
If DOGE can maintain its position above the 200 EMA, currently at $0.26, it may trigger a relief rally and signal the end of the downtrend. In this scenario, the next resistance zone is $0.34, with a potential recovery towards $0.30 to $0.32. If momentum picks up, DOGE could even return to the $0.36-$0.38 range. However, a trend reversal would require higher volume and buying strength.
Conversely, if DOGE drops below the 200 EMA, it would generate a significant bearish signal and pave the way for a more thorough correction. A rapid decline towards $0.22, the next important support level, could occur, with the possibility of DOGE retracing to $0.18, wiping out a large portion of its recent gains. This would put the meme coin in a risky position, and traders would closely monitor any signs of recovery.
The U.S. Dollar Index (DXY) is currently trading at 108.60, indicating volatility and a strong upward trend, supported by its 50 and 200 EMAs. Historically, Bitcoin (BTC) and DXY have had an inverse relationship, with BTC struggling when the dollar rises and soaring when it falls. If DXY fails to maintain support at 107.70 and declines towards 106.40 or lower, it could provide a bullish setup for Bitcoin.
Bitcoin may regain momentum and attempt to break out towards $100,000 if DXY begins to fall, assuming it stays at its current levels. However, BTC may experience pressure and a short-term decline back towards $92,000 to $90,000 if DXY recovers and breaks above 109.50. The Federal Reserve's policies and forthcoming economic data will be key factors in determining how the DXY moves.
