Dogecoin Price Forecast: Here is why Spanish inflation ensures no speedy recovery for crypto
|- Dogecoin price tanked over 4% this morning and accelerated after Spanish inflation data.
- DOGE fans are searching for support, which is still a few percentage points away.
- Cryptocurrencies are not enjoying a weaker US Dollar as global investments are dispersed.
Dogecoin (DOGE) price action slid lower on Monday after a pure technical break over the weekend of the green ascending trend line, but bulls could not close above it. Unable to get out of the pool in time, traders are set to see the price drop lower in search of the bottom of this tank. With the surprise jump in Spanish inflation, cryptocurrencies are missing the much-needed investors as markets are starting to move in dispersed order.
Dogecoin price weakens as global becomes local
Dogecoin price slid below $0.0900 on Monday after bulls saw their attempts to break above the green ascending trend line cut short as patience drying up. With another firm rejection at $0.0944, bears entered in large numbers and have been running price action into the ground. Cryptocurrencies, from a bigger point of view, should be able to further recover in the coming months if it was not that currently several economies are starting to move at different paces. In Europe inflation is still growing, while in the US. inflation has been declining.
With this dispersed pace in inflation and price pressure, the EU is set to undergo even more rate hikes. This turns the noose on investors as they will want to choose safe coupons of bonds as their interest is growing, while risky cryptocurrencies will not make the cut for most investment portfolios. This means that cryptocurrencies will also see more inflow from the US, but less out of Europe, which means that the overall recovery for cryptocurrencies will stall. When global inflation starts to drop on all fronts, traders can start planning for a full recovery in cryptocurrencies toward 2024.
DOGE itself is looking for support near $0.0824 with monthly support and the 55-day Simple Moving Average as support. Next week, it will be vital to see where the monthly pivot will be as January is on its last legs. With several central banks and the US jobs report on Friday, it is very likely that DOGE tanks toward $0.0757 to find support near the 200-day SMA.
DOGE/USD daily chart
Already rumors are emerging that the US Federal Reserve will hand out a 25-basis-point hike and that the Bank of England will pitch a dovish hike. That would support the markets and erase a portion of the nervousness and risk premium priced in on Monday and Tuesday. Expect to see DOGE quickly back against the green ascending trend line and possibly break above $0.0944 to test $0.1004 by Friday.
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