Dogecoin Price Plummets as the Crackdown on Bitcoin Trading Intensifies in China

Last Updated July 23rd 2021
2 Min Read
  • Dogecoin bleeds profusely, revisiting lows beneath $0.2.
    • DOGE’s recovery will be an uphill battle based on the massive resistance highlighted by the transaction history model.

    Dogecoin investors are deeply underwater after crypto assets plunged massively from the weekend, spilling into the new week. Initially, the crackdown on Bitcoin trading and other crypto-related activities in China triggered the dip. However, cryptocurrencies have lacked the willpower to effect recoveries across the board.

    At the time of writing, DOGE has stretched the bearish leg under $0.2 and trades at $0.97. If this level is not reclaimed in the short term, investors should fasten their seatbelts in preparation for a colossal breakdown toward $0.1.

    Dogecoin pulldown is far from over

    All technical levels seem to have aligned for a perfect storm as losses to $0.1 linger. The Relative Strength Index (RSI) shows that bears have more influence, and Dogecoin will likely drop further.

    The Moving Average Convergence Divergence (MACD) has a massive bearish signal based on the four-hour chart. In addition to sliding profoundly in the negative region, the MACD line keeps widening the divergence beneath the signal line, accentuating the bearish calls.

    Similarly, it would be detrimental to Dogecoin if bulls fail to rise above $0.2 in the short term. Note that the longer the price stays under this level, the quicker the overhead pressure intensifies.

    DOGE/USD four-hour chart

     DOGE/USD 4-hour chart 062221

    The IOMAP model by IntoTheBlock (ITB) tracks the addresses that bought Dogecoin at various prices in the past. When these addresses are grouped along with the coins bought, precise resistance and support ranges emerge. Traders can use this on-chain metric to decide the type of trades to make or to validate the uptrend or downtrend.

    Currently, the IOMAP highlights robust resistance between $0.221 and $0.227. Here, nearly 20,000 addresses previously purchased 4.3 billion DOGE. This is a massive hurdle that may hamper recovery in the short term.

    Dogecoin IOMAP model

     DOGE/USD volume chart 062221

    On the downside, vital support areas are short supply; thus, Dogecoin may keep falling in the coming sessions. However, the IOMAP directs our attention to the region running from $0.18 to $0.185.

    Here, around 1,700 addresses previously bought approximately 359 million DOGE. The seller congestion in this zone is not robust enough compared to the colossal hurdle. Hence, if gains do not make it above $0.2, the freefall to $0.1 will be apparent.

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