Dogecoin price is trying to recover from its wounds from last week
- Dogecoin price tries to keep the ground above the crucial technical area.
- DOGE could go either way, depending on the market sentiment for the coming weeks.
- Expect to see price action underpinned around $0.0700.
Dogecoin (DOGE) price is recovering and consolidating after a brutal performance for the first part of November. DOGE saw a 35% profit erased and turned into a negative print in the first week of November and a 26% meltdown between the open on Monday and the close on Sunday night last week. With traders grappling to see any silver lining, a calm week is more than welcome and could see some confidence returning with small upticks.
DOGE price welcomes this consolidation after its poor performance
Traders have seen Dogecoin price thrown in the bin as FTX broke the fragile confidence traders had regained in cryptocurrencies over the summer after the wounds incurred from the LUNA stablecoin meltdown. Unfortunately, that confidence got broken as FTX triggered another wave of sell-offs and victims in cryptocurrencies with a lot of traders and, within the industry, stakeholders being misgiving to one another. This was translated by the sharp decline in two weeks that erased almost all the profits from the past summer.
DOGE luckily gets underpinned around $0.0700 with three high weekly levels in the same area, just a few pips or ticks away from each other. The first element is the monthly S1 support level at $0.0700. The two other elements, the 55-day Simple Moving Average (SMA) and the 200-day SMA are present at around $0.0760 and are the first line of defence to catch any falling knives before price action is pushed back to $0.1004.
DOGE/USD weekly chart
Although that underpinning is there, it could simply not be enough to support price action if a few external elements chose to create some headwinds. A combination of elements like another missile hitting Poland, US dollar strength that kicks back in, and equities that sell-off would be a toxic cocktail that would see DOGE price hit $0.0566 or even $0.0409, depending on the severity of the catalyst that triggered the move. That would mean that another 30% to 50% of losses could still unfold after another FTX casualty or geopolitics erupting again.