Dogecoin Drops 40% from Recent Highs; Potential for Further Decline Still High

Dogecoin has experienced a sharp correction, with price retracing close to 40% from the peaks attained in the last week. Binance CEO Changpeng Zhao had revealed in an earlier Tweet that more than 50% of Dogecoin was being held by only 20 wallets and that one such address had 27% of this crypto. 

As if to confirm what CZ theorized, a particular wallet in question has been identified by hawkeye Reddit users as having more than $2billion in funds. Several large buying transactions on DOGE have been noticed on this account recently.

Such majority ownership could have implications on the price action of DOGE, especially if this wallet were to suddenly decide to dump a lot of its holdings into the market. So what is the outlook for DOGE heading into the new week?

Technical Outlook for Dogecoin

The retracement of Dogecoin from the swing low of 28 January to the swing high of 7 February shows that price ended up hitting a low at the 38.2% Fibonacci retracement level (0.0567357). Buyers seem to have rejected any further attempts at a decline. This bounce has enabled DOGE to hit the 0.0619512 price mark, where lows of 8/12 February are found. A push above this level targets 0.0684667 (23.6% Fibonacci price level). 

On the flip side, the presence of progressively lower lows from 8 February to the present day would be concerning to buyers. This scenario may indicate that further upside may have stalled. 

However, the price needs to break the 38.2% Fibonacci support to open the door for a resumption of the decline. This move would target the 0.0472545 support (50% Fibonacci retracement), with 0.0377733 and 0.0242746 price marks serving as additional support. 

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Dogecoin Daily Chart

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