Dogecoin Price Drops, $15 Million Liquidated: Will It Rebound?

Dogecoin Governor -4.9% Dogecoin, the largest meme coin in the cryptocurrency market, fell 6% on January 8 to a low of $0.3415, the lowest level in nearly a week.

This drop occurred amid high trading volume, with token trading volume reaching $5.26 billion, up from $3.3 billion on Tuesday. The surge in volume indicates that some investors have started to close their positions.

The decline in Dogecoin has triggered a significant increase in liquidations. On Tuesday, $20 million worth of bullish positions were liquidated, and nearly $15 million were liquidated on Wednesday. These liquidations are the largest since December 19. When large-scale liquidations occur, they typically lead to a sharp drop in prices as leveraged bullish trades are automatically closed by exchanges.

Further data shows that the weighted financing rate for Dogecoin remains positive, indicating a decrease in demand for long positions. This also reflects an increase in investor caution as U.S. bond yields soar and cryptocurrency prices retreat.

The likelihood of the U.S. Securities and Exchange Commission approving a DOGE ETF this year is still very low. According to Polymarket, this likelihood dropped by 13% to 36% on Wednesday.

In recent weeks, the price of Dogecoin has retreated from a December high of $0.4830 to $0.34. Despite the decline, it remains above the 38.2% Fibonacci retracement level as well as the 50-day and 100-day moving averages.

The percentage price oscillation indicator has turned bullish, with its histogram staying above the zero line.

Given these factors, DOGE may remain in this range and could potentially rebound to last year's high of $0.4830 this quarter. This trend would represent a 43.50% increase from current levels. However, in a bearish scenario, the token could drop to the low of $0.2630 on December 20.

As of the time of writing, Solana-based Dogecoin Bonk (BONK) and Dogwifhat (WIF) have both dropped about 11%, while the recently popular AI agent meme coin AI16Z fell nearly 15% today.

Floki (FLOKI), Brett (BRETT), and Gigachad (GIGA) have also dropped about 11% in the past day, although as of the time of this writing, SPX6900 has fallen nearly 14%, and Popcat (POPCAT) has plummeted nearly 16%.