Dogecoin (DOGE) has lost nearly half of its value this year as investors have shunned meme coins in the midst of unfavorable macroeconomic conditions.
Donald Trump’s aggressive trade policies have once again opened the door for higher inflation in the United States and the markets have been spooked.
The Fear and Greed Index, a well-known market sentiment gauge, has been in Fear territory since the beginning of March and has slipped to record lows two times already as the President has revealed his intentions to go all in on this crusade against “unfair trading practices.”
ƒIn the past year, the combined value of meme coins, as tracked by CoinMarketCap, has retreated by 4.12% only.
However, their valuation currently sits nearly 68% off its all-time high of $137 billion from December last year.
Some tokens like PEPE (PEPE) and Bonk (BONK) have seen nearly two-thirds of their market cap evaporate since the year started as well as even memes with strong communities of loyal fans have experienced sharp downturns.
Meanwhile, Solana-based tokens have been shining lately. Fartcoin (FART), for example, has seen its price skyrocket by 210% in the past month while POPCAT has experienced a milder 29.3% rally during this same period.
Dogecoin Needs to Stay Above $0.14 to Avoid a Catastrophic Drop
Looking at the charts, DOGE has been on a sharp downtrend since December and has rejected a move above the daily 21-day EMA multiple times.
The $0.1400 level has acted as support for the price action three times already as there seems to be strong interest from buyers at that particular level.
Positive momentum for DOGE has been slowing down again after the token rejected a move above the 21D EMA for the last time on Sunday.
This confirms a bearish short-term outlook for DOGE in the near term and a retest of the $0.1400 seems imminent at this point.
The macroeconomic backdrop is highly unfavorable at this point as Trump’s measures could result in higher inflation and will deter the Federal Reserve from making interest cuts this year.
Market participants were waiting for at least two cuts during what remains of the year. If this scenario goes off the window, the market’s downturn could accelerate and plunge DOGE below this key support.
DOGE’s volume profile shows that this has been a value area since the year started, meaning that it attracts strong volumes.
Hence, a big drop below DOGE’s current levels would mean that bulls have lost the fight and this could result in significant price volatility that would likely favor short-sellers in the near term.
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