Due to deteriorating sentiment in the cryptocurrency industry, Dogecoin's price has retreated for two consecutive days.
Dogecoin, the largest meme coin in the cryptocurrency market, fell 6% on January 8, dropping to a low of $0.3415, the lowest level in nearly a week.
This drop occurred amid high trading volumes, with token trading volume reaching $5.26 billion, up from $3.3 billion on Tuesday. The surge in volume indicates that some investors have begun to close their positions.
The drop in Dogecoin has triggered a significant increase in liquidations. On Tuesday, $20 million worth of bullish positions were liquidated, with nearly $15 million liquidated on Wednesday. These liquidations are the largest since December 19. Large-scale liquidations typically lead to significant price drops as leveraged bullish trades are automatically closed by exchanges.
Further data shows that the weighted funding rate for Dogecoin remains positive, indicating reduced demand for long positions. This also reflects an increased cautious sentiment among investors as U.S. bond yields surge and cryptocurrency prices retreat.
The likelihood of the SEC approving a DOGE ETF this year remains low. According to Polymarket, this possibility dropped 13% to 36% on Wednesday.
However, some analysts expect Dogecoin's price to rebound. As we previously noted, Bitcoin usually drives broader cryptocurrency market trends, which are currently in a strong bull market and forming a bullish triangle flag pattern, typically signaling more gains to come.
KrissPax noted in a post on X that DOGE's current price trend reflects patterns emerging in 2023 and 2024. He pointed out that the token rose in November 2023, followed by a drop, consolidation, and then a recovery in 2024.
In recent weeks, the price of Dogecoin has retreated from a December high of $0.4830 to $0.34. Despite the drop, it remains above the 38.2% Fibonacci retracement level and the 50-day and 100-day moving averages.
The percentage price oscillator has turned bullish, with its histogram remaining above the zero line.
Considering these factors, DOGE may remain within this range and possibly 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 from December 20.
But these meme coins have experienced larger declines.
Dogecoin's (Dogecoin) situation is not looking good, as a mixed U.S. economic report released earlier on Tuesday led to a market decline, causing this leading meme currency to plummet 10% in the past 24 hours.
However, despite being the largest loser among the top 10 cryptocurrencies by market cap (outpacing heavyweight coins like Bitcoin, Ethereum, and Solana), as of the writing of this article, the situation for other major meme coins is even worse.
As of the writing of this article, Solana-based dog coins 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) also fell about 11% in the past day, but as of the writing of this article, SPX6900 has dropped nearly 14%, while Popcat (POPCAT) has plummeted nearly 16%.
In the past day, only one meme coin among the top 250 cryptocurrencies by market cap showed an upward trend: Akuma Inu, a dog-themed token on Ethereum's Layer 2 network Base, which rose 55% on the day and saw a weekly increase of 264%.
Dogecoin's current price is around $0.35, with a daily decline slightly below 10%. Even so, in the past week, Dogecoin has still risen 11%, thanks to a surge earlier this month when this original meme coin's price approached $0.40.
Galaxy Digital stated last week that Dogecoin is expected to first reach $1.00 in 2025, surpassing the historical high of $0.73 set in 2021—though the price drop on Tuesday made the goal seem further away.
The volatility of meme coins is notorious; while mature high-value coins are unlikely to drop to zero in a short time, their volatility is still greater than major coins like Bitcoin or Ethereum. For example, Bitcoin fell nearly 5% today, but Dogecoin and other meme coins' declines were double that of Bitcoin.
