Dogecoin (DOGE) could soon suffer a significant price crash. A recent analysis shows that Bitcoin’s price is on the brink of a price correction, which will also lead to a downtrend for the foremost meme coin.
Dogecoin To Drop Alongside Bitcoin
Dogecoin is set to drop alongside Bitcoin if the latter eventually suffers the massive price correction that crypto analyst Ali Martinez recently predicted that the flagship crypto could witness. In an X (formerly Twitter) post, Martinez mentioned that on Bitcoin’s 2-month chart, the TD Sequential indicator had presented a sell signal in anticipation of a price correction.
The crypto analyst further stated that Bitcoin could drop to as low as $40,600 if the crypto fails to hold the $51,000 support level. This projected price decline for Bitcoin is expected to also lead to a price crash for Dogecoin because of the price correlation between both crypto assets. Data from the market intelligence platform IntoTheBlock shows that Dogecoin’s price correlation with Bitcoin is at 0.9, indicating a strong positive price correlation.
Related Reading: Dogecoin Forms ‘Second Low’ That Could Trigger 4,000% Rally Above $4
Bitcoin, as the leading crypto, is also known to have a massive impact on the broader crypto market. As such, a price decline undoubtedly translates to downward pressure for DOGE. It is worth mentioning that Dogecoin was one of the coins that suffered the most price decline following Bitcoin’s August 5 crash when the flagship crypto dropped below $50,000.
Meanwhile, a Bitcoin crash is likely because of the flagship crypto’s historical trend of recording losses mostly in September. Besides Martinez, other crypto analysts like CryptoQuant’s Head Of Research, Julio Moreno, have also predicted that Bitcoin may suffer a significant price crash this month.
September has also not been the best month for DOGE. Data from CryptoRank shows that the foremost meme coin has suffered a monthly loss in all but three September since 2014. The last time Dogecoin closed September in profit was in 2021.
Onchain Metrics Paint A Mixed Picture For DOGE’s Price
Onchain metrics are currently painting a mixed picture for Dogecoin, with some bullish and others bearish. There has been a surge in Dogecoin’s large transactions, which suggests that crypto whales are heavily accumulating at the moment. The bid-ask volume imbalance is also bullish for Dogecoin.
On the other hand, the number of DOGE addresses in the money is declining due to the meme coin’s bearish price action, especially with DOGE still under the crucial support level of $0.10. Meanwhile, DOGE’s adoption has remained stagnant, indicating a lack of interest in the meme coin among new investors.
At the time of writing, Dogecoin is trading at around $0.09, up over 1% in the last 24 hours, according to data from CoinMarketCap.
Featured image created with Dall.E, chart from Tradingview.com
Credit: Source link
