The Dogecoin price is on track to end the week lower as the cryptocurrency industry goes through a consolidation phase and its trading volume drops. DOGE is trading at $0.3175, which is 30% below the highest level this month. It has a market capitalization of more than $41 billion and is the 6th largest cryptocurrency in the world.
Dogecoin still struggling
Like all cryptocurrencies, Dogecoin is going through a challenging period. Its price is down by more than 57% from its highest level this year and its ranking among all cryptocurrencies has also slipped. It is not alone since other cryptocurrencies like Bitcoin and Ether have also crashed.
There are several reasons why Dogecoin price has retreated. For one, Elon Musk, a leading promoter of the coin has not tweeted or saying anything about it. In the past, DOGE tends to rise when he talks about it.
Further, there is the rising challenge of regulations, energy consumption for the proof-of-work coins, and potential for a tightening phase of monetary policies. You can read an in-depth review of these issues here in my recent Bitcoin price prediction.
At the same time, further data shows that search volume for Dogecoin has fallen. Google Trends data show that the searches have fallen to the lowest level since April. In most periods, Dogecoin price tends to be more active when more people are talking about it.
Meanwhile, while the number of addresses with Dogecoin has steadily increased, the total volume traded every day has fallen. On June 10 (Thursday), the total volume of DOGE that was traded was worth more than $2 billion. In contrast, the volume that was traded on May 10 was worth more than $10 billion.
Dogecoin address count
Dogecoin price prediction
Historically, major moves of DOGE prices are usually influenced by the overall performance of Bitcoin. And as I noted before, the coin is not yet in the buying zone.
Turning to the four-hour chart, we see that Dogecoin has been in a consolidation phase as evidenced by the falling Average True Range (ATR) indicator. It remains between the important support and resistance levels at $0.2490 and $0.4468.
Therefore, in my view, the coin will enter the buy zone when it moves above this resistance level. On the other hand, a drop below the support at $0.2490 will open to the possibility of it falling to $0.200.