The Dogecoin price struggled in June as the broad sell-off in cryptocurrencies accelerated. DOGE started the month at $0.3446 and rose by about 35% in the first few days and then it crashed by more than 60% to $0.163. It is now trading at $0.2450, which is above 50% above the lowest level in June. That has brought its total market capitalization to more than $32 billion, making it he sixth-largest cryptocurrency in the world. It is sandwiched between Cardano and XRP.
DOGE’s June price action
The Dogecoin price struggled in June as investors remained concerned about three things. First, there was the crackdown in China, where the Central Bank ordered banks and other fintech companies to intensify their crackdown in crypto.
Precisely, companies like Alipay and WeChat Pay were asked to identify accounts dealing with the coins and deal with them. Further, the government cracked-down on cryptocurrency mining. As such, investors were afraid about the impact of these measures to the overall crypto ecosystem.
Second, DOGE price retreated because of the overall tone of the Federal Reserve. With the US economy firing in all cylinders, investors were concerned that this will lead to higher interest rates. Indeed, the Fed shifted its tone during its June meeting and hinted at two interest rates in 2023. Previously, the bank had signaled that it would hike in 2024. A hawkish Fed is often seen as being bearish for risky assets like Dogecoin.
Finally, we saw substantially lower volume in June as many investors exited their crypto trades. Data compiled by CoinMarketCap shows that the biggest daily volume was in June 2, when Dogecoin worth more than $11 billion was traded. It was followed by June 2 and June 22. In contrast, Dogecoin worth more than $22 billion was traded in a single day in May. So, what next for the Dogecoin price in July?
Dogecoin price prediction
The four-hour chart shows that the Dogecoin price has dropped by more than 67% from its highest level this year. The chart also shows that the coin has formed a descending channel that is shown in purple. In fact, the price is along the upper side of this channel and is slightly below the 61.8% Fibonacci retracement level. Further, it is oscillating at the same level as the 25-day and 50-day exponential moving averages (EMA).
A closer look also shows that the coin is forming an inverse head and shoulders pattern. In price action, this pattern is usually a bullish sign.
Therefore, I suspect that the coin’s price will bounce back in July. If this happens, the next key level to watch will be $0.4, which is about 60% above the current level.
The alternative scenario is where Dogecoin reverses and erases some of these gains and drops to the lower side of the channel at $0.164.