- Dogecoin price has suffered a steep correction over the past few hours.
- The meme-coin was able to bounce back, reclaiming a critical support barrier.
- While market participants continue shivering in fear, a particular indicator suggests that it is time to buy the dip.
Dogecoin price took a nearly 60% nosedive, generating over $200 million worth of liquidations.
Dogecoin price crashes
Dogecoin price took investors by surprise as it crashed from $0.47 to hit a low of $0.20 within minutes. The sudden bearish impulse seems to be an overblown reaction to the recent cryptocurrency ban imposed by China.
From a technical perspective, the spike in downward pressure pushed DOGE toward the 200 twelve-hour moving average. This is the first time since the bull market began in mid-November 2020 that Dogecoin price tests this trend-following indicator for support.
While market participants continue shivering in fear, DOGE managed to bounce back. It rose by nearly 90% from the $0.20 low and reclaimed the 100 twelve-hour moving average as support.
Interestingly enough, the Tom DeMark (TD) Sequential indicator sits on a red eight candlestick anticipating the emergence of a buy signal in the form of a red nine candlestick. Such a positive formation suggests that Dogecoin price could be primed to recover fully and target higher highs.
But first, DOGE would have to slice through the 50 twelve-hour moving average at $0.45 and turn it into support.
DOGE/USDt 12-hour chart
If Dogecoin price fails to hold above the 100 twelve-hour moving average, the bullish outlook will be jeopardized. In that case, DOGE could drop to retest the 200 twelve-hour moving average at $0.20.
