In the face of significant market volatility, Dogecoin has recently experienced a drop of about 12%, currently priced at approximately $0.34, but the overall trend remains relatively stable.
During this round of sell-off, Dogecoin retraced to the important support level of the 50 EMA. Despite the clear downward trend, from a broader perspective, Dogecoin still possesses potential recovery opportunities.
On-chain data presents some contradictory signals: first, DOGE's futures open interest saw a sharp decline of 15.35%, dropping to $3.58 billion, indicating a retreat in speculative sentiment; however, surprisingly, derivative trading volume surged by 108.98% in the past 24 hours, reaching $12.07 billion, suggesting traders' unusually positive reaction to market price fluctuations and a significant increase in market activity.
Interestingly, long positions dominated the liquidations, with over $26.98 million in positions being forcibly closed in a single day, reflecting some traders' overly optimistic expectations regarding market trends.
From a technical standpoint, Dogecoin's price is approaching a turning point, with the 100 EMA establishing a critical defense line at $0.29, serving as the last barrier.
Once it loses support, a drop to $0.23, touching the 200 EMA and long-term support levels, may become inevitable; looking upward, the dual technical and psychological resistance at $0.40 constitutes strong resistance.
If the next target can approach $0.45 and successfully break through, bullish sentiment is likely to be reignited. Although Dogecoin has experienced ups and downs recently, its strong community and unique market position inject hope for a rebound.
Looking back, during economic downturns, its ability to attract retail investors has always been able to hedge against downside risks. Currently, if traders want to discern whether Dogecoin is consolidating for strength or continuing to pull back, they must closely monitor trading volume and market dynamics.
Dogecoin's current support level is facing severe testing; if it cannot hold, the decline will surely accelerate; if it can stabilize and rebound, a new upward path may begin. Therefore, traders must be cautious in their decision-making, considering the broader market environment.
