The Dogecoin price action is currently locked between two critical technical levels, the macro golden pocket and the macro 0.5 Fibonacci retracement level. This observation was highlighted by crypto analyst Kevin (@Kev_Capital_TA) on the social media platform X. Interestingly, according to the analyst, Dogecoin’s immediate fate hinges not on its internal dynamics but on external factors, primarily on Bitcoin’s performance.
Bitcoin’s Influence Over Dogecoin’s Market Movement
As the world’s largest cryptocurrency, the general sentiment towards other cryptocurrencies is mostly always tied to the sentiment towards Bitcoin. Periods of high inflows into Bitcoin are always highlighted by inflows into other cryptocurrencies, and vice versa, except during altcoin seasons.
As the largest meme coin, Dogecoin is one of the biggest reflections of sentiment in Bitcoin. According to data from IntoTheBlock, Dogecoin currently has a 0.77 price correlation with Bitcoin out of a maximum scale of 1. Interestingly, this correlation sometimes even stays in the 0.9 range, especially during rallies. In his commentary, crypto analyst Kevin noted that Dogecoin’s current price trajectory is not self-determined but instead heavily influenced by Bitcoin’s performance.
As it stands, recent market dynamics have seen the Dogecoin price stuck between the macro golden pocket and macro 0.5 Fibonacci levels. In technical analysis, the golden pocket is a region between the 61.8% and 65% retracement levels. These levels, commonly used in technical analysis, serve as zones of support and resistance, and their breach in either direction could lead to a notable breakout.
Patience As A Strategy
The Dogecoin price has been grappling with a lack of momentum and has struggled to replicate the notable rallies witnessed in October and November. During that period, Dogecoin captured the market’s attention with an impressive upward movement of over 400%, largely driven by enthusiasm before and after the US presidential election.
However, that bullish sentiment appears to have waned, leaving the meme coin now perambulating around the $0.4 mark. Furthermore, Bitcoin’s inability to sustain a significant break above the $100,000 price level has cast a shadow over altcoins like Dogecoin, whose performance is often tied to Bitcoin’s market behavior.
Despite the current price stagnation, crypto analysts like Kevin remain optimistic about the meme coin. Mentions across social media remain bullish, and technical analyses suggest that the Dogecoin price still has a lot of room to run.
“I see nothing telling me the cycle is over; therefore, this should head higher soon enough regardless of short-term noise,” he commented.
At the time of writing, Dogecoin is trading at $0.404 and is down by about 3.5% in the past 24 hours. Bitcoin, on the other hand, is trading at $99,800 and is down by 0.8% in 24 hours.
Featured image created with Dall.E, chart from Tradingview.com