Dogecoin (DOGE) Loses 12% in Matter of Hours: Not That Bad

Considering the volatility of the market as a whole, Dogecoin’s performance is still comparatively stable despite a recent 12% decline to trade at about $0.34. DOGE has returned to its 50 EMA, a crucial support level, as a result of the sell-off. Even though the drop suggests that momentum is waning, the bigger picture suggests that DOGE may still have room to recover.

There are conflicting signals in on-chain data. Indicating a decrease in speculative activity, open interest in DOGE futures has fallen by 15.35% to $3.58 billion. But over the past day, the volume of derivatives has increased by 108.98% to $12.07 billion. As traders respond to price changes, this implies increased market activity. Interestingly, long positions dominated liquidations; in a single day over $26.98 million was liquidated, indicating traders’ overly optimistic outlook.

On a technical level, DOGE’s price is getting close to a turning point. The 100 EMA supports the $0.29 level, which acts as a crucial backup area. DOGE might test $0.23, the 200 EMA and a long-term support level, if it breaks below this. On the upside, a technical and psychological barrier at $0.40 represents resistance.

The next target is close to $0.45, and a breakout above this level might rekindle bullish momentum. Despite recent volatility, DOGE’s community and distinct market position offer hope for a rebound. Historically, the asset’s capacity to draw in retail investors during downturns has served as a hedge against prolonged drops.

To find out if DOGE is consolidating or continues retracing, traders should keep a careful eye on volume and market activity for the time being. DOGE’s current support levels are a critical test. Failure to hold key zones would probably hasten a decline, but a rebound might pave the way for another rally. Traders are encouraged to exercise caution and think about the larger market environment before making choices.

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