The trading volume of Dogecoin (DOGE) has dropped to its lowest level since November, indicating a significant decrease in market participation for both spot and derivatives trading.
This decline is closely related to Dogecoin's failure to break the $0.48 price level since December 8. If this trend continues, then the 300% increase in Dogecoin this year may face more downward pressure.
Dogecoin trading interest has plummeted.
In October, the price of Dogecoin was only $0.10, but by the first week of December, it surged to $0.48, and some analysts even believed that its price might continue to rise. This price surge is likely related to Trump's election as President of the United States and the return of retail investors.
In the weeks following Trump's election, the trading volume of Dogecoin reached $5.69 billion, showing strong market interest in cryptocurrencies. However, according to Santiment data, the trading volume has now fallen to $415.31 million, the lowest level since November 4.
Generally, an increase in trading volume is a bullish signal for the market. But if the current downtrend continues, Dogecoin may face further price drops in the short term.
Another signal suggesting that Dogecoin may further decline is the weighted sentiment. This indicator measures the overall market view on cryptocurrencies by analyzing comments on social media.
When the weighted sentiment is positive, it usually indicates that market sentiment leans towards bullish; while a negative value indicates that market sentiment is more pessimistic, often accompanied by bearish sentiment. Currently, this indicator is -0.57, showing an increase in negative comments, which means market sentiment is more pessimistic.
If this sentiment continues, Dogecoin may face greater demand shortages, and the price may endure more downward pressure, potentially even breaking below the support level of $0.48.
DOGE Price Prediction: Lower lows may occur next.
On the 4-hour chart, DOGE continues to operate below the descending triangle. The descending triangle is a bearish chart pattern, usually composed of a downward sloping upper trend line and a flatter horizontal lower trend line.
This pattern usually indicates that prices will continue to fall, as sellers continuously push prices down while buyers attempt to maintain support levels.
As the current price of Dogecoin has fallen below the lower support line of the descending triangle, it indicates that bulls may not be able to push the price higher in the short term. Therefore, the price of DOGE may continue to decline and could potentially break below the support level of $0.36.
However, if market sentiment turns bullish and trading volume picks up, the situation may change. If buyers become active again, DOGE may rebound and break through the current downtrend, with a price expected to rise back to $0.45.
