With the Dogecoin Foundation boldly purchasing approximately 10 million Dogecoins, the Dogecoin reserve has now become a hot topic in the cryptocurrency world. However, this announcement comes at a crucial time.
Impact of Dogecoin reserves on price: Surge or a 30% plunge?
Bearish flag pattern indicates trouble
Dogecoin price predictions appear quite concerning due to the bearish flag pattern formed on the daily chart. Since the drop from $0.214 at the end of 2024, Dogecoin's price trend has been constrained between a descending trend line and a support level around $0.137.
On March 24, DOGE attempted to break through the upper trend line but closed with a bearish candle, indicating resistance. If it falls below the lower trend line, Dogecoin could drop significantly by 30% to around $0.11, or even lower. Additionally, the RSI indicator has dropped from 58.71 to the current 47.45, and a death cross has appeared between the 50-day and 200-day EMAs, all of which further exacerbate the bearish outlook for Dogecoin.
Dogecoin Foundation's reserve plan
The Dogecoin reserve officially launched on March 24, 2025. Despite these efforts, Dogecoin's upward momentum seems to have weakened on March 25, indicating that many traders believe the news is insufficient to overcome various market concerns. The Dogecoin reserve represents an attempt to position Dogecoin as a more reliable asset for broader adoption in payments and similar applications.
Tesla's relationship puts pressure on DOGE
Elon Musk's association with Dogecoin continues to affect market performance, with Dogecoin frequently fluctuating alongside Tesla's market movements. Tesla's financial health is crucial for Dogecoin's valuation, as its stock price has plummeted over 50% since the end of 2024, impacted by declining sales, production challenges, and Musk's role in government. On March 11, $16 billion in market value evaporated, further undermining confidence in Dogecoin and disrupting price predictions.
