Dogecoin (DOGE) has turned sharply bearish on Wednesday as profit-taking by investors lead to a downslide in Bitcoin prices, taking the whole crypto market down with them. At the time of writing, DOGE/USD is trading at around $0.302, holding at the key $0.30 mark.
The leading memecoin came under some more pressure over discouraging comments from Bitstamp’s CEO Julian Sawyer who said that his exchange was not keen on listing Dogecoin and other emerging cryptocurrencies as they do not meet the world’s oldest crypto exchange’s stringent requirements. Despite it being promoted by several prominent celebrities, Sawyer does not believe in the potential of the joke cryptocurrency, adding, “If you’ve got a billionaire making one tweet and suddenly the fundamental value of that [token] has completely changed, that is not a good place to put your investments.”
While Dogecoin’s stellar performance through 2021 so far was attributed to Robinhood, the company is yet to roll out its crypto wallet feature which would let users make deposits and withdrawals of digital currencies, including DOGE. A video posted by crypto influencer Matt Wallace suggests that the fintech company may be waiting until next year to bring out this feature as it may be worried it could cause investors to move their crypto holdings out of the app and to other platforms.
According to Wallace, “If you have your money currently in a cryptocurrency and you wait longer than a year then you no longer have to pay that super high tax rate and because such a huge amount of the Dogecoin spikage was in that February period a lot of the people who initially invested have been holding since around then.” If Robinhood rolls out crypto wallets after February 2022, “a lot of people may want to leave anyway because they would have that significantly lower tax rate when they actually moved their money out and transferred it somewhere else.”
Despite the bearish mood, the DOGE token could find some support from an important development – the return of the Dogecoin Foundation with Ethereum’s co-founder Vitalik Buterin as a board member. The Foundation will closely engage with the memecoin’s community and bolster the rollout of projects that can drive the adoption of Dogecoin across various sectors.
Key Levels to Watch
On the 4-hour chart of DOGE/USD, most of the smaller moving averages as well as the MACD are indicating a bearish bias among investors at the moment. However, the larger timeframe MAs as well as the momentum indicator do suggest interest among buyers too.
The price is sitting right under the pivot point at $0.306 and further selling pressure can see Dogecoin test the immediate support level at $0.264. On the other hand, a reversal in the sentiment can take DOGE higher towards a test of the first resistance at $0.383.