Dogecoin (DOGE) Risks 25% Price Crash as NFT Data Dashes Rate Cut Hopes

Dogecoin (DOGE) has started giving up its intraday gains after the release of the latest U.S. nonfarm payroll (NFP) data on June 7. In doing so, the top memecoin is close to triggering a classic bearish reversal pattern. Let’s discuss these factors in detail.

Resilient U.S. Jobs Market Hurt Crypto Assets, Including Dogecoin

DOGE’s price experienced a maximum drawdown of over 2.10%, reaching a low of $0.158. The cryptocurrency’s decline occurred after the U.S. Department of Labor reported a seasonally adjusted increase of 272,000 non-farm payrolls in May, surpassing the consensus estimate of 185,000.

Other cryptocurrencies also suffered, with top-ranking cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH), falling by as much as 1.85% and 1.80%, respectively, after the NFP data release.

Meanwhile, the U.S. dollar index (DXY), which measures the greenback’s strength against a basket of foreign currencies, surged 0.6%, aligning with a 3.38% jump in the benchmark U.S. 10-year Treasury note yield.

This significant increase in the yield reflects investors’ expectations that the Federal Reserve might maintain or even raise interest rates in response to a robust job market, as higher yields typically signal expectations of higher interest rates.

In turn, these increases reduce the opportunity cost of holding riskier assets like stocks and crypto, which is why the Dogecoin price dropped significantly on June 7. Further declines in the DOGE market risk trigger its prevailing rising wedge pattern.

Dogecoin Technical Analysis: Rising Wedge Breakdown Next?

From a technical standpoint, the Dogecoin price is fluctuating inside what appears to be a rising wedge pattern.

For the unversed: Rising Wedges form when the price trends inside an upward-sloping range comprising two converging trendlines. They typically resolve when the price breaks above the upper trendline and rises by as much as the maximum height between the upper and the lower trendline.

Applying the same technical rule on the DOGE/USD daily price chart brings its downside target for June to around $0.12 if the breakdown point is $0.158. That amounts to a circa 25% crash by the month’s end.

Conversely, a bounce from the wedge’s lower trendline may lead the DOGE price toward the pattern’s apex—where two trendlines converge—at around $0.187 in June.