Dogecoin (DOGE), the largest meme cryptocurrency, has formed a head and shoulders pattern, according to a recent update shared by cryptocurrency trader Josh Olszewicz.
The popular reversal pattern is often used by traders to identify the advent of a downtrend. The reversal point on the left side of Olszewicz's chart is known as "the left shoulder." The high point is known as "the head" of the pattern. The right shoulder represents another reversal point, which comprises the neckline together with the other reversal point on the left.
The price of Dogecoin could potentially break the neckline, thus forming a lower low. In such a case, the bearish pattern would be considered to be complete.
This price pattern essentially shows the loss of bullish momentum when the price fails to make a higher high.
At press time, Dogecoin is changing hands at $0.15 on major spot exchanges. The coin is down more than 4.2% over the past 24 hours, performing in line with the rest of the cryptocurrency market.
Bitcoin plunges as rate cut odds dwindle
Earlier today, Bitcoin, the top cryptocurrency, briefly dipped below the $63,000 level before recovering to $63,622.
According to analytics firm Fitch, a potential Fed rate cut could be out of reach this year following recent economic data that shows slowing GDP growth and growing inflation in the U.S. The firm said, "The hot inflation print is the real story in this report. If growth continues to slowly decelerate, but inflation strongly takes off again in the wrong direction, the expectation of a Fed interest rate cut in 2024 is starting to look increasingly more out of reach."
Futures traders are now pricing in zero rate cuts for 2024 in a stunning reversal. Earlier, the Fed was expected to cut rates three times this year.
The hawkish U-turn is unlikely to bode well for cryptocurrencies (especially meme coins). Risk assets are known to benefit from a loose monetary policy, which does not seem to be on the menu in 2024.
Yuri Molchan
Denys Serhiichuk
