Dogecoin Market Cap Falls to $46.18 Billion Amid 22% Price Drop
Over the past week, the total crypto market cap decreased by 11.53% to $3.2 trillion. Meme coins fell from a peak of $120 billion to a current valuation of $93.26 billion.
Among top meme coins, Dogecoin (DOGE) dropped 22% to $0.3135, with a market cap of $46.18 billion and a 32% decline over the last 30 days.
Despite bearish conditions, Dogecoin's support at $0.30 remains intact. Market observers are questioning whether Dogecoin will experience bullish momentum as Bitcoin stabilizes around $95K.
Dogecoin Floating Above $0.30 Aims for Rebound
The DOGE price action indicates a failure to maintain the rising channel pattern, marked by an 11.13% drop on December 9 due to a bearish engulfing candle. The price fell to the psychological mark of $0.30 amid broader market corrections.
Currently, DOGE fluctuates between the 50-day and 100-day EMA lines, consolidating over the weekend. Dogecoin is trading at $0.3141, reflecting a minor increase of 0.5%.
Photo: TradingView
The daily RSI line has flattened above the oversold boundary, suggesting potential for a reversal if momentum returns. Additionally, recovery efforts are close to a long-term support trendline, bolstering underlying support for Dogecoin.
Immediate resistance levels for Dogecoin are set at $0.38 and the psychological mark of $0.40. A breakdown below the local trendline and the 100-day EMA could see prices drop to the 200-day EMA at $0.2198, indicating a downside risk of approximately 30%.
Analyst Projects Parabolic Rise to $20
Despite short-term volatility, analysts anticipate a parabolic rise for Dogecoin. Independent analyst Ali Martinez noted a rising channel similar to patterns observed in 2017 and 2021.
Photo: TradingView
In previous cycles, Dogecoin experienced significant surges following retracements, including a 220% increase followed by a 40% retracement in 2017 and a 476% surge with a 56% retracement in 2021. In 2024, Dogecoin saw a 240% increase before a 46% retracement, suggesting potential for another rally towards a price target of $20, despite seeming optimistic.
Dogecoin OI Drop and High Liquidations Warn of Crash
The recent increase in price volatility led to a drop in Dogecoin open interest to $1.95 billion, falling below the $2 trillion mark, indicating reduced interest. The long-to-short ratio turned bearish at 0.981, with liquidations reaching $19.33 million in the last 24 hours.
Bullish positions faced $11.45 million in long liquidations, signaling growing bearish sentiment. Additionally, the Dogecoin OI-weighted funding rate decreased from 0.0497% to 0.0053%.
Conclusion
The decline in open interest and funding rates suggests a shift in derivative sentiment towards bearishness, with sellers gaining control. However, technical signals and historical trends indicate potential for a bounce-back rally. Given the high volatility characteristic of meme coins, the ongoing correction may be healthy if it maintains above the support trendline.
This dip could present an entry opportunity for optimistic buyers.