Can Dogecoin Finally Break the $0.20 Price Level in August?

Dogecoin prices have been languishing near the 20 cent price level for quite some time now even though some of the other cryptocurrencies have moved higher. What’s the prediction for DOGE and can the meme coin break the $0.20 price level in August?

Bitcoin prices briefly moved above $40,000, while Ethereum is back above $2,500. However, Dogecoin prices are sagging near $0.20. Overall, cryptocurrencies have been very volatile over the last few months. There have been several market-moving events like regulatory scrutiny, China’s crackdown, and supportive tweets from celebrities.

There are a few things that crypto investors should watch this week. First, China has been tightening the screws on tech companies. The country sees cryptocurrency as a threat to financial stability and also a potential challenger to its digital yuan project. China has cracked down on cryptocurrency mining and trading in the past too.

Energy-intensive cryptocurrency mining goes against China’s blue skies policy. Similarly, the growing cloud of digital currencies like Dogecoin is seen as a threat to financial stability by many governments, including China.

A natural extension of the tech crackdown for China could be to decisively target cryptocurrency-related activities in the country. On more than one occasion, China has shown that maintaining stability is the top priority for authorities over investors' trading gains.

The bipartisan infrastructure bill has some bad news for cryptocurrency investors since it has a provision to raise $28 billion from cryptocurrency investors. The amount is a tiny fraction of the over $1.5 trillion cryptocurrency market. However, the move will likely send ripples in the cryptocurrency market.

Jake Chervinsky, who’s a strategic adviser at Variant, a venture from investing in crypto networks, thinks that the regulations are a bad idea. He tweeted, “It's literally impossible for non-custodial actors like miners to get the information they need to do Form 1099s. In practice, this could mean a de facto ban on mining in the USA.” He believes that it the regulations are adopted it will do “more harm than good.”

Chervinsky sees the KYC requirements as “surveillance.” Anonymity has been one of the USPs of cryptocurrencies like Dogecoin. Many people think that higher regulatory scrutiny will kill cryptocurrencies. The regulations proposed in the infrastructure bill make market participants apprehensive since they fear it could dampen the sentiments.

Lawmakers would have to think out of the box to fund the infrastructure bill. With U.S. debt levels set to rise more, the fiscal extravagance has to be repaid in some form. From lawmakers' perspective, collecting funds from cryptocurrency traders look like a convenient option to fund the deficit.

Looking at the technicals, DOGE looks mixed in August. While it's finding support at the 200-day SMA (simple moving average), it's facing resistance at the 50-day SMA, which is at $0.2265. To signal an uptrend, Dogecoin has to rise above the 50-day SMA. On the downside, breaching the 200-day SMA will signal a downtrend.

Dogecoin is trading above the short-term moving averages like the 10-day, 20-day, and 30-day SMA, which is encouraging. The 14-day RSI (relative strength index) is neutral at 47.5.

To sum it up, technically, the 50-day and 200-day SMA would be crucial for DOGE. From a fundamental perspective, watch out for the evolving regulatory scenario including the infrastructure bill.