The cryptocurrency landscape witnessed a notable development as the Senate Banking Committee released a draft bill proposing a regulatory shift for Dogecoin (CRYPTO: DOGE). The bill aims to classify Dogecoin as a commodity, placing it under the same regulatory framework as Bitcoin (CRYPTO: BTC) and providing it with regulatory clarity that could reshape its market dynamics.
This draft legislation’s central provision hinges on the fact that a Dogecoin exchange-traded fund (ETF) was trading on a major exchange prior to January 1. Consequently, Dogecoin qualifies automatically for "non-ancillary asset" status under the new rules. This designation exempts Dogecoin from the securities laws and registration requirements typically administered by the Securities and Exchange Commission (SEC), which many other cryptocurrency projects remain subject to.
From a market infrastructure perspective, such a development would allow cryptocurrency exchanges like Coinbase to list Dogecoin without facing the legal uncertainties tied to securities law violations. Additionally, asset managers who previously paused Dogecoin ETF applications over regulatory concerns now have clearer legal grounds to pursue these investment products once again. The Senate Banking Committee is set to vote on the bill this Thursday, and if it passes, it could effectively eliminate significant regulatory obstacles hindering the introduction of Dogecoin ETFs.
Market responses reflected this potential regulatory breakthrough. On Tuesday, both Dogecoin and Shiba Inu (CRYPTO: SHIB) experienced a price rally of around 5%. Focusing on Dogecoin’s price action, after months of trading below key technical levels, the token managed to surpass its 20-day moving average of $0.13828. While modest, this move marks the first time in several months that Dogecoin has closed above this short-term indicator.
Dogecoin’s recent price trajectory showcased a significant drawdown from a September high near $0.27 to a low point in December around $0.1215, representing a decline of approximately 55%. The current price rebound suggests a potential stabilization after this marked selloff. However, Dogecoin remains pressured below its 50-day exponential moving average (EMA) at $0.14288, 100-day EMA at $0.15911, and 200-day EMA at $0.17894. Reclaiming these moving averages is generally viewed by technical analysts as necessary milestones before confirming a robust market recovery.
Further insight comes from on-chain data, which indicates that despite the recent steep price declines, investors continue accumulating Dogecoin tokens at these lower levels. This accumulation pattern often suggests confidence that current pricing may represent a buying opportunity. Additionally, Dogecoin is confronting a mid-channel resistance zone between approximately $0.143 and $0.145. Should Dogecoin successfully break above this range, it may prompt short sellers to cover positions, further propelling prices toward the next technical objective near $0.16.
Conversely, if Dogecoin fails to maintain support at $0.138, it could trigger further downward pressure, potentially testing the $0.126 level and subsequently a support zone between $0.115 and $0.12. A breakdown below the $0.10 mark would signify a more severe capitulation phase, highlighting increased downside risks.
Turning to Shiba Inu, the token recently formed a double-bottom chart pattern, characterized by the price touching a similar low twice without breaking lower. This formation is often interpreted by traders as a potential bullish reversal signal. If this pattern holds and gains validation, it may create conditions that encourage aggressive short-covering as market sentiment begins to recover from extensive negativity incurred during the prior selloff.
Nonetheless, some caution is warranted as the Supertrend indicator for Shiba Inu remains bearish, registered at $0.00000754, and the price continues to trade below all significant resistance levels. Shiba Inu would need to surpass the $0.000014 threshold to signal that the downward trend is abating and initiate a credible recovery towards targets in the range of $0.000016 to $0.000018.
Regarding downside supports, the $0.00000822 level stands as initial support, with a critical downside pivot at $0.0000075. Falling beneath this latter level would likely revisit the December low of roughly $0.00000676, indicating continued vulnerability.
In summary, the Senate Banking Committee’s draft bill has introduced significant regulatory implications for Dogecoin by proposing to treat it as a commodity akin to Bitcoin. This regulatory clarity has been met with positive price action in both Dogecoin and Shiba Inu markets, although technical indicators suggest that both assets face important resistance and support levels that will define their near-term trajectories. The outcome of the Senate vote could prove a pivotal catalyst for Dogecoin’s exchange listings and ETF developments.