Dogecoin price resumed its downward trend on Wednesday as the mood in the crypto industry darkened. The meme coin fell more than 4%, in line with Bitcoin, Ethereum, and BNB Coin.
Dogecoin is now nearly 50% lower than its highest point this year and remains 75% below its all-time high. Here are three reasons why the token continues to lose ground among investors.
Competition from other meme coins
Dogecoin has suffered due to rising competition from newer meme coins like Pepe, Dogwifhat, Bonk, and Brent. These tokens have surged more than 200% this year, outperforming DOGE.
The daily trading volume reflects this competition. Data from CoinGecko reveals Dogecoin’s 24-hour volume was $585 million, with a market cap over $17 billion. Conversely, Pepe, with a $4.36 billion market cap, had a volume of $676 million. Dogwifhat had a 24-hour volume of $587 million, indicating higher demand for these newer tokens.
Dogecoin volume vs Pepe and Dogwifhat
Crypto fear and greed index has slipped
Another reason for Dogecoin’s decline is growing investor fear. The widely-tracked fear and greed index has dropped to a neutral point of 48, down from a year-to-date high of 90.35.
Typically, cryptocurrencies and stocks fall when market sentiment turns fearful. This current fear arises from the absence of a significant catalyst in the crypto market.
Dogecoin price death cross nears
Dogecoin price chart
Technically, the DOGE price is retreating because of risky patterns. The coin is nearing a "death cross," which occurs when the 200-day and 50-day moving averages cross.
If the death cross forms, it could accelerate Dogecoin’s sell-off. In May, it faced resistance at $0.1750, and in June at $0.1285. Similar bearish patterns have also impacted Bitcoin, which influences altcoins like Dogecoin. Bitcoin has formed a quadruple top pattern and fallen below the 100-day and 50-day moving averages.
