Dogecoin Experiences Price Slide Amid Market Correction, Tests Trendline Support for Possible Rebound
Summary:
Dogecoin (DOGE) experiences a price drop amid a larger downturn in the crypto market, marked by a 4.82% decrease to around $0.15. Influenced by disappointing US GDP growth and personal consumption data, traders have adjusted their expectations for Federal Reserve interest rate cuts, resulting in a plummet in open interest and funding rates. The cryptocurrency is currently testing its trendline support for a potential rebound.
Today witnessed a downturn in the trading price of Dogecoin (DOGE), mirroring the broader crypto market's steep adjustment. On April 27, DOGE's value significantly underperformed the crypto sector, slipping 4.82% to roughly $0.15, as compared to the market's 2.25% decrease. Over the past month, from its local crest of $0.229, Dogecoin has seen a sharp tumble of 38%. Here, we delve into the factors most likely influencing Dogecoin's recent setback.
The dip in Dogecoin today is a symptom of a more extensive crypto market downturn subsequently following the US GDP data release on April 25. Interestingly, the US economy expanded by 1.6% in Q1 2024, falling short of the anticipated 2.5% growth. Concurrently, personal spending in March saw a nominal growth of 0.3%.
Reacting to these less-than-stellar economic numbers, swap traders moderated their projections for Federal Reserve interest rate slashes for 2024 to a mere 33 basis points, a substantial drop from the six quarter-point reductions forecasted earlier this year.
Heightened interest rate projections have spurred the yield on the US, 10-year Treasury note, to reach 4.739% on April 24, marking a five-month high. The elevated yield figures have consistently persisted, lessening the attractiveness of high-risk cryptocurrencies. To illustrate, on the day when yield hit its peak, Bitcoin saw a cumulative outflow of $217 million from five spot exchange-traded funds.
Dogecoin's open interest (OI) has also witnessed a slump, as it fell to $865.63 million on April 27 compared to its recent high of $2.21 billion last month. The funding rate has been adjusted to 0.0063% every eight hours. The dip in OI and the minimised funding rate suggest a prevalence of bearish mood in the market, hinting at traders' deliberate caution regarding future Dogecoin price trends or possibly fading interest in high-leverage Dogecoin trading.
Today's price drop in Dogecoin appears to be an extension of the selling trend initiated at the resistance level demarcated by a decreasing trendline and the 50-day exponential moving average (EMA). This downward resistance has, notably, obstructed the uptrend of DOGE multiple times in the last month.
As of April 27, the digital currency was probing its ascending trendline resistance for a potential rebound. If successful, the price is predicted to aim for the downward trendline resistance, landing around $0.159 by the end of April. It's worth noting that this report does not serve as investment counsel; any trading or investment actions come with inherent risks, and investors should undertake their research before making decisions.
Published At
4/27/2024 5:52:19 PM
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