Dogecoin (DOGE) has faced a 6% drop today, hitting an intraday low of $0.3404 on Dec. 19, as Bitcoin's (BTC) slip below the $100,000 mark triggered a wave of sell-offs across the memecoin sector. This decline outpaced the broader crypto market, which fell by approximately 3.5% during the same period.
Key Factors Behind DOGE’s Pullback
Market-Wide Sell-Off Post Rate Cut
The Federal Reserve's 25 basis-point rate cut on Dec. 18 was followed by a hawkish press conference from Chair Jerome Powell, dampening investor sentiment. Powell's remarks about limited rate cuts in 2025 and an increased 2025 inflation outlook from 2.1% to 2.5% further weighed on the market. This led to Bitcoin’s 2% drop, rippling through the memecoin market, with Dogecoin (DOGE) and other top memecoins like Shiba Inu (SHIB) and Pepe (PEPE) experiencing declines.
Increased Trading Volume Amid Losses
The memecoin market witnessed over $10 billion in value wiped out within 24 hours, while trading volume surged nearly 50%. This highlights the heightened risk-off sentiment among investors, particularly in speculative assets like memecoins.
Bearish Market Sentiment
Santiment data shows a downturn in Dogecoin’s social sentiment since Dec. 3, reflecting growing impatience among traders amid prolonged price consolidation. Negative sentiment could, however, signal a potential reversal if DOGE manages to hold its current support levels.
Technical Weakness and Resistance
DOGE’s recent decline followed a bearish divergence between its price and the relative strength index (RSI), a common signal of weakening uptrend momentum. Key resistance zones, including $0.40–$0.42 and $0.47, have further hindered DOGE’s upward movement.
Outlook for DOGE
Professional trader Natalie Dormer notes that the pullback has brought DOGE to a critical support level around $0.35, aligning with its 50-day exponential moving average. Dormer remains cautiously optimistic, stating, “Pullbacks and volatility do happen in any uptrend, but our structure still favors upside for $DOGEUSD.”
While the current bearish sentiment poses challenges, holding key support levels could pave the way for a rebound, provided broader market conditions stabilize, according to Cointelegraph.
