Why shorting Dogecoin price could be the way to go

Dogecoin (DOGE) price hit a curb as the ASIA PAC session triggered some bearish moves in price action. DOGE price now sees dark clouds forming after Tuesday’s clear skies after the FED alluded to a more hawkish rate path to control inflation. This gave a cramp to the markets and saw all asset classes pulling back from their moves on Tuesday, triggering red numbers in cryptocurrencies across the board, with DOGE price at risk of dropping 22%.

DOGE price at risk of dropping by looming headline risk

Dogecoin price sees investors cashing in on the small gains they booked after the move higher on Tuesday, as Shanghai reported reopening and easing lockdowns, deflating several tail risks in the process. It seems nothing is what it seems, as those tail risks are now being inflated again and weighing on the price action in all asset classes. Across the board, markets are seeing price action coming back from the highs or lows printed on Tuesday.

DOGE price is no different, with the price nearing the monthly S2 support level at $0.0869. If that level does not hold, expect to see a more considerable drop that might result in a 22% correction towards $0.0700. Another leg lower towards $0.0500 could also be on the cards but would need another catalyst, such as the return of dollar strength, reflected in  new lows for EUR/USD.

DOGE/USD daily chart

As long as the S2 support level holds, any short-term sideways price action is acceptable. Once markets start to settle down and a bullish theme presents itself in an environment where things are finally stable, the DOGE price could pop above $0.0944 and hit the magic $1 marker, making 14% gains in the process.