Dogecoin Is Under Strong Pressure Amid Sell-Off In Crypto Markets
It’s a tough day for crypto markets as all major cryptocurrencies are under pressure. Bitcoin has recently made an attempt to settle below the psychologically important $60,000 level and tested the 50 EMA at $59,100 while Ethereum tried to get below $4,100.
Meanwhile, Dogecoin gained strong downside momentum after it managed to settle below the 50 EMA at $0.2555 and tested the support at $0.2250 before moving back above the $0.23 level.
Another meme cryptocurrency, Shiba Inu, has also found itself under strong pressure and made an attempt to settle below $0.000045.
The current sell-off is broad, and there is nothing unusual in Dogecoin’s performance. According to CoinMarketCap, Dogecoin remains in the top-10 cryptocurrencies by market capitalization, followed by Shiba Inu which occupies the eleventh place.
Let’s take a look at the big picture for Dogecoin. Dogecoin faced significant resistance near $0.34 and pulled back below the 20 EMA which is located near the $0.25 level.
A move below the 20 EMA on the weekly chart corresponded with the move below the 50 EMA on the daily chart, which led to significant pressure on Dogecoin. The general weakness of crypto markets served as an additional downside catalyst for Dogecoin.
The nearest significant support level on the weekly chart is at the 50 EMA which is located near the $0.20 level. Dogecoin received support near the 50 EMA after strong pullbacks in July and later in September. The price did not test the 50 EMA level in both cases as traders began to increase purchases of Dogecoin when it was sliding towards the 50 EMA.
At this point, Dogecoin price remains well above the 50 EMA, so there is no material “defense” level in the nearby. In this light, the current pullback may serve as an opportunity for short-term traders, but it does not look strong enough for strategic purchases.
In order to have a chance to gain upside momentum, Dogecoin will have to move back above the 20 EMA on the weekly chart, which will provide it with an opportunity to move closer to the next significant resistance on the weekly chart which is located near the $0.30 level.
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