Memecoin News: Why Is Dogecoin Price Dropping?

Dogecoin (DOGE) Price Analysis: Significant Decline Amid Market Correction

As of January 8, Dogecoin (DOGE) has experienced a notable price drop of 11.75% in the past 24 hours, bringing its value down to $0.352. This decline is part of a wider slump in the cryptocurrency market, influenced by recent macroeconomic trends and technical indicators pointing towards bearish momentum.

What’s Driving Dogecoin’s Price Decline?

Macroeconomic Pressure Spurs Sell-Off

The recent downturn in Dogecoin's price can largely be attributed to the evolving landscape of U.S. monetary policy. Traders are currently reassessing the Federal Reserve's strategy regarding interest rates following the release of robust economic data. Reports such as the ISM services index and JOLTS job openings have indicated a thriving economy, which diminishes the likelihood of imminent rate cuts.

Consequently, the yield on the 10-year U.S. Treasury note has surged to its highest levels since May 2024, leading to a decreased appetite among investors for riskier assets, particularly in the cryptocurrency sphere.

Long Liquidations Amplify Downward Momentum

The cryptocurrency market is currently undergoing significant liquidations, totaling $710.47 million over the last day, with more than $631.13 million originating from long positions. Specifically, Dogecoin faced approximately $26.95 million in liquidations, primarily from bullish bets totaling around $23.85 million.

This liquidation event is exacerbating downward pressure on DOGE's price, as the market reacts to the declining values of various cryptocurrencies amid prevailing macroeconomic challenges.

Will Dogecoin Price Drop Another 25%?

Currently, Dogecoin is consolidating within a potential bull flag formation, which typically suggests bullish tendencies following a prior price rally. However, the cryptocurrency has struggled to break through the upper trendline of the bull flag, encountering considerable resistance.

If DOGE continues its descent, it may test the lower trendline of the flag near $0.266, a level that corresponds with the 50-period exponential moving average (EMA) on the 3-day chart. Such a movement could imply an additional decline of roughly 25% from present prices by February 2025.

On the flip side, should the price break above the upper trendline, it could propel Dogecoin to approximately $0.830 by March 2025, representing a striking 140% rally from its current valuation.

Market Sentiment and Key Levels to Watch

As the situation evolves, traders and investors should closely monitor market sentiment and key resistance and support levels related to DOGE. Being aware of these trends is essential for making informed decisions in the rapidly changing landscape of cryptocurrency.