Dogecoin’s price took a significant plunge on Monday, echoing broader downtrends in the crypto and stock markets. The meme-powered cryptocurrency fell to a six-month low at $0.1628, marking a drop of over 66% from its December peak. This decline coincides with increasing fears of a recession triggered by Donald Trump’s impending imposition of reciprocal tariffs on key US trading partners.
Investors are increasingly cautious amid the risk-off sentiment, causing crypto fear and greed index to dip into the fear zone at 24. The stock market gauge has also entered the extreme fear zone at 18. However, a potential positive for Dogecoin and other cryptocurrencies lies in the prospect of increased Fed intervention.
The Federal Reserve’s historical response to major economic events like the COVID-19 pandemic and the Global Financial Crisis typically involves slashing interest rates and implementing quantitative easing measures to stimulate growth.
Dogecoin price analysis suggests a bearish trend. The daily chart reveals a significant downtrend from last year’s high of $0.4836 in December, down to $0.1628 today. Additionally, Dogecoin has breached key support levels at $0.2260, marking a historical low from March 28th, 2023, and the upper side of the cup-and-handle pattern formed this year.
The chart also highlights a falling wedge pattern, suggesting a rare bullish reversal signal. The coin has breached the upper side of the wedge pattern, adding to the potential for a rebound.
However, analysts warn that Dogecoin’s price may decline further before bouncing back in April. A drop below $0.1430 would invalidate this positive outlook.
The current dip could also lead to a double-bottom formation at $0.1430 with a neckline of $0.2057, potentially leading to a 60% surge if it holds up.
However, analysts stress that a drop below the key support level at $0.1430 would invalidate this bullish scenario.