Dogecoin trading volume drops to $415 million, which may trigger another 300% surge
This decline coincides with DOGE's failure to break through $0.48 since December 8. If this trend continues, the meme coin's year-to-date (YTD) increase of 300% may face further downside pressure.
In October, Dogecoin's price was $0.10. By the first week of December, it had surged to $0.48, with several analysts suggesting that the value of this cryptocurrency could be higher. The price surge may be related to Donald Trump's election as President of the United States and the return of retail investors.
Weeks after Trump's election, Dogecoin's trading volume climbed to $5.69 billion, reflecting significant interest in cryptocurrency trading. However, as of the time of writing, Santiment data shows that the trading volume has dropped to $415.31 million.
This is the lowest value since November 4. An increase in trading volume is typically a bullish signal. Therefore, the recent decline, if it continues, suggests that DOGE may face another price drop in the short term.
Another indicator suggesting further decline for DOGE is the weighted sentiment. The weighted sentiment index measures the broader market's view on cryptocurrency through comments on social media platforms.
According to the 4-hour chart, DOGE continues to trade below the descending triangle. A descending triangle is a bearish chart pattern characterized by a downward sloping upper trend line and a flatter horizontal lower trend line.
This pattern often signifies a continuation of price declines as sellers consistently push prices lower while buyers struggle to maintain support at the horizontal trend line.
As DOGE's price is below the lower support line, it indicates that bulls may not be able to push the meme coin higher in the short term. Instead, the cryptocurrency's value may fall below $0.36.
