Dogecoin price falls, $15m liquidated: will it go back up?

by

Dogecoin price retreated for two consecutive days as sentiment in the crypto industry worsened.

On January 8th, there was a 6% drop in the value of Dogecoin (DOGE), the leading meme-based cryptocurrency, which dipped down to $0.3415 – marking its lowest point in nearly a week.

In this bustling market landscape, I’ve observed a significant drop, yet within an environment where a staggering $5.26 billion worth of tokens were exchanged – a notable increase from the $3.3 billion traded on Tuesday. This spike in trading volume indicates that some investors might be in the process of offloading their holdings, hinting at a potential trend of position liquidation.

The decline in Dogecoin led to a substantial surge in forced closures of bullish bets. On Tuesday alone, positions valued at around $20 million were forcibly closed, with an additional $15 million on Wednesday. These forced closures represent the largest since December 19th. Typically, these mass liquidations cause a steep price decrease as automated closing of over-leveraged optimistic trades by exchanges takes effect.

It appears that additional information confirms that the average funding fee on Dogecoin is still positive, signifying a decrease in interest for long-term investments. This trend could also suggest heightened caution since cryptocurrency values are falling concurrently with rising U.S. bond returns.

The likelihood that the Securities and Exchange Commission will approve a Dogecoin Exchange Traded Fund (ETF) this year seems fairly slim. As per Polymarket’s analysis, the chances dipped by approximately 13%, leaving us at about a 36% probability on Wednesday.

Nevertheless, certain experts anticipate that the value of Dogecoin might rebound. Previously mentioned, Bitcoin – a significant influencer in the wider cryptocurrency market – continues to thrive within a robust bull market and shows signs of forming a bullish pennant pattern, typically suggesting further increases ahead.

On X’s latest post, KrissPax observed that Doge’s current price movement seems to resemble the trends from 2023 and 2024. He highlighted that the coin experienced a surge in November 2023, followed by a dip, a period of stabilization, and finally a recovery in 2024.

The price trend of Dogecoin in November 2023 mirrors its movement from a year prior. Last year, Dogecoin increased, declined, and stabilized before a significant surge in 2024. This year, after a rise in November, it dipped and is now holding steady. Anticipating another major upward move in 2025.

— KrissPax (@krisspax) January 8, 2025

Dogecoin price analysis

Over the recent weeks, the price of Dogecoin has retreated, going from a peak in December at $0.4830 to currently $0.34. Even with this drop, it still hovers above the 38.2% Fibonacci retracement level and both the 50-day and 100-day moving averages.

The Percentage Price Oscillator (PPO) is showing a positive trend, as its graph remains consistently above the zero mark.

Based on the current trends I’ve observed as a researcher, it seems plausible that DOGE will maintain its current position for now, with a possible upward trajectory towards last year’s high of approximately $0.4830 in this quarter. This potential surge represents an increase of around 43.50% from the present value. However, it’s also important to consider a more pessimistic outlook where DOGE could decline to the December 2021 low of $0.2630, marking a potential drop from its current position.

Read More

2025-01-08 20:18