3 reasons why Dogecoin (DOGE) price is falling on Wednesday
Dogecoin price resumed its downward trend on Wednesday as the mood in the crypto industry darkened.
DOGE dropped more than 4% Wednesday morning, consistent with the performance of Bitcoin, Ethereum, and BNB Coin. Dogecoin is now down nearly 50% from its highest point this year and it remains 75% below its all-time high. Here are the three reasons why the token continues to lose ground among investors.Â
Competition from other meme coins
Dogecoin has dropped because of the rising competition from other newer meme coins like Pepe, Dogwifhat, Bonk, and Brent. All these tokens have risen by more than 200% this year, making them some of the top performers in the crypto industry.
This competition is being reflected in the daily volume. Data by CoinGecko shows that the volume of Dogecoin in the past 24 hours stood at $585 million while its market cap was over $17 billion.
Pepe, with a market cap of $4.36 billion had a volume of $676 million. Similarly, Dogwifhat had a 24-hour volume of $587 million. That is a sign that these newer tokens are seeing more demand from traders.
Dogecoin volume vs Pepe and Dogwifhat
Crypto fear and greed index has slipped
The other reason why Dogecoin and other cryptocurrencies have retreated is that investors are starting to become fearful.
The closely watched fear and greed index has now dropped to the neutral point of 48, down from the year-to-date high of 90.35. If this trend continues, there is a high likelihood it will move to the fear zone.Â
In most cases, cryptocurrencies and stocks retreat when there is a sense of fear in the market. This fear is happening because of the lack of a major catalyst in the crypto industry.
Dogecoin price death cross nears
Dogecoin price chart
DOGE price is also retreating because of the risky patterns that have formed. Technically, the coin is about to form a death cross pattern, which happens when the 200-day and 50-day moving averages cross each other. If this pattern happens, it means that the coin’s sell-off will accelerate.
Further, past attempts for Dogecoin to recover have faced substantial resistance. In May, it faced a strong resistance at $0.1750 and in June, the same happened at $0.1285. These bearish patterns have also happened in Bitcoin, which has a major impact on altcoins. Bitcoin has formed a quadruple top pattern and moved below the 100-day and 50-day moving averages.
