Crypto Market Crash Erases Dogecoin Price Gains Since Feb’24. Read CoinChapter.com on Google News
NOIDA (CoinChapter.com)—The crypto market crash ran over the canine-themed token Dogecoin, forcing it to erase all its gains since Feb. 2024. The steep drop came amid a widespread sell-off in the cryptocurrency market, exacerbated by macroeconomic uncertainties and tightening regulatory scrutiny.
Moreover, investors’ risk aversion, driven by rising interest rates and a strengthening US dollar, has further contributed to the downward pressure on digital assets, including Dogecoin.
Everything Looks Bearish For Dogecoin Price
The recent data for Dogecoin (DOGE) presents a concerning outlook. Wallet distribution metrics indicate a decrease in large holders.
Dogecoin wallets with different balances. Source: Messari
Addresses holding over one million native units have seen stagnation or decline, a trend mirrored in the 100,000, 10,000, and 1,000 unit categories. The reduction suggests a decrease in confidence among major investors, potentially signaling a bearish sentiment in the market.
Further compounding the negative outlook is the nose-diving open interest. Open interest, which represents the total number of outstanding derivative contracts, decreased alongside the price of DOGE.
Dogecoin open interest. Source: Coinglass
The decline typically indicates a reduction in market participation and interest, particularly from institutional players or major traders.
The drop in open interest, coupled with a falling price, suggests a lack of optimism for a near-term recovery, as participants either close positions or hesitate to enter new ones.
Additionally, the OI-Weighted Funding Rate has been trending downwards. A falling funding rate suggests reduced costs for maintaining long positions, often indicating a rise in short positions or decreased demand for DOGE.
Yet, Bulls Fight Back
Dogecoin bulls fought back later in the day to help the memecoin recover after the DOGE price dropped nearly 23% to a daily low near $0.08. The price drop was the largest single-day rout since April earlier this year.
DOGEUSD daily price chart with RSI. Source: Tradingview
Should the downtrend continue, DOGE price stands to drop to the support near $0.087. Moreover, if the selling continues, the DOGEUSD pair is likely to drop to the support near $0.076 before recovering.
On the other hand, a recovery from here would result in DOGE price facing resistance near $0.106 and $0.123, where the 50-day EMA (purple wave) reinforces the 0.786 FIB resistance level.
Understandably, Dogecoin’s relative strength index (RSI) remained oversold, with a score of 27.95 on the daily charts. Though usually a bullish reversal signal, at the moment, the oversold RSI would have little say in DOGE’s price movement.
The post Crypto Market Crash Erases Dogecoin Price Gains Since Feb’24 appeared first on CoinChapter.
