Emily Walker
As the Federal Open Market Committee (FOMC) meeting approaches, observers are keeping a close eye on Dogecoin’s price fluctuations and relating them to its remarkable surge in 2021. Past trends indicate that a positive announcement from the FOMC could greatly influence Dogecoin’s value, possibly igniting a new rally.
Connection Between Dogecoin’s Price Surge and FOMC Decisions
In January 2021, the FOMC chose to maintain interest rates, aiming to support liquidity in the U.S. financial markets. This decision led to a significant increase in Dogecoin’s price the following day.
Crypto analyst ChandlerCharts recently shared insights on how the FOMC’s actions might shape Dogecoin’s future. By comparing charts from January 2021 and forecasts for 2025, the analyst identified notable parallels, linking both periods to upcoming FOMC meetings.
The first chart depicts that in January 2021, Dogecoin underwent an impressive rise, surpassing the 0.618 Fibonacci extension level near the $0.01 mark. This increase was timed with the FOMC meeting and the U.S. Presidential inauguration, where the Fed’s rate decision greatly contributed to Dogecoin’s ascent.
Chandler shows Dogecoin’s current price setup on the second chart, revealing a similar bullish trend. Presently, DOGE is around the crucial 0.382 Fibonacci level at $0.33, a support zone that previously facilitated Dogecoin’s price rally following the 2021 FOMC announcement.
DOGE is now testing the critical $0.33 support level, akin to its behavior in 2021. The price movements leading up to January 2025 reflect historic patterns that suggest a potential rally above the 0.618 Fib level, hitting the 1.0 Fibonacci level, followed by a pullback to the 0.236 Fib.
Should the forthcoming FOMC meeting on January 28-29 favor liquidity as it did in 2021, Chandler anticipates that Dogecoin could soar to $0.5, aligned with the 0.618 Fibonacci level. He’s also optimistic that similar conditions could lead to an even higher rally reaching $0.7 at the 1.0 Fibonacci level.
Given this optimistic outlook, Chandler advises investors to prepare for heightened volatility ahead of the FOMC announcement. While past performance does not guarantee future results, the existing similarities in market sentiment and liquidity conditions surrounding a favorable rate decision make this a crucial moment for Dogecoin’s price trajectory.
Market Sentiment: Bearish or Bullish? The Role of the Upcoming FOMC Meeting
The FOMC meets eight times annually and is known to sway the crypto market by revealing the Federal Reserve’s monetary policies. Daitaro, another crypto analyst, pointed out that the crypto market typically exhibits either bearish or bullish trends prior to the FOMC meetings.
After the FOMC announces its interest rates, actual price movements often occur, resulting in either gains or losses for leading cryptocurrencies like Bitcoin and Dogecoin. With the FOMC meeting taking place today and tomorrow, the market’s response to a positive or negative outcome could greatly affect cryptocurrency valuations.