Dogecoin Price Could Drop Further with Positive Bitcoin ETF Verdict
Dogecoin (DOGE) price fell below the $0.08 mark on Jan. 10, with market data indicating that a positive Bitcoin Spot ETF verdict could lead to more downside for DOGE. Analysts and speculators are anticipating an imminent approval verdict from the US Securities and Exchange Commission (SEC) regarding the ETF. Recent data trends show a negative correlation between the prices of Dogecoin and Bitcoin over the past month, suggesting that if BTC reacts positively to an ETF approval, DOGE price could decline.
DOGE Price Correlation to BTC at 5-Month Low
Dogecoin was created as a light fork of the Bitcoin blockchain in 2013, and their prices have been closely linked since then. However, in recent weeks, DOGE and BTC prices have been moving in opposite directions. While DOGE price has dropped by 26% from its local top record on Dec. 11, BTC price has increased by 5% during the same period. The correlation coefficient between DOGE and BTC has reached its lowest point in five months, indicating an inverse correlation between the two cryptocurrencies.
Miners’ Selling Pressure and Bearish Sentiment
Data shows that Dogecoin miners and node validators have been selling off their holdings in the past month, adding to the bearish sentiment around DOGE. Miners’ reserves of DOGE have declined by 140 million coins between Dec. 10 and Jan. 10, worth approximately $11.13 million at current prices. A rapid decline in miners’ reserves is seen as a bearish signal as it dilutes market supply without an increase in demand, leading to price declines. This selling trend among miners suggests pessimism about DOGE’s short-term price prospects.
Forecast: Potential Price Correction and Support Levels
Based on market data trends, there is a risk of a major price correction for Dogecoin. However, for the bears to validate this, they must break the initial support buy-wall around $0.070. The largest cluster of current DOGE holders acquired their coins at an average price of $0.071, making it a strong support level. On the upside, if DOGE price rebounds above $0.10, there could be resistance from addresses that acquired their coins at an average price of $0.084.
Hot Take: Dogecoin Faces Downside Risk with Potential BTC ETF Approval
With the possibility of a positive Bitcoin ETF verdict looming, Dogecoin faces downside risk due to its negative correlation with BTC. If the SEC approves Spot BTC ETFs, it could trigger a significant decline in DOGE price. Additionally, the selling pressure from miners further adds to the bearish sentiment surrounding Dogecoin. Investors and speculators should closely monitor these factors and be prepared for potential price downsizing in the coming days.
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