Amid growing speculations of a market crash, Dogecoin is down by 10%. As sellers aim to test $0.30, will a long-standing trendline change the bearish course of action?
As the crypto market liquidation surged to $656 million over the past 24 hours, the bearish grip on the market is tightening. Surprisingly, the newly-launched official TRUMP tokens TRUMP $5.04 24h volatility: 1.4% Market cap: $1.01 B Vol. 24h: $143.81 M witnessed $50 million liquidation in the last 24 hours. Amid the launch of the Trump Family Tokens, the existing top meme coin players, Dogecoin DOGE $0.13 24h volatility: 1.6% Market cap: $21.82 B Vol. 24h: $626.33 M and others, are taking a bearish hit.
Dogecoin, the biggest meme coin with a market cap of $50 billion, is down nearly 10% in the past 24 hours. Furthermore, Shiba Inu has dropped 8.06%, and the official Trump token has lost nearly 40% of its value in the past 24 hours.
As the bearish clouds over the meme coin segment darken, the market cap of the segment is down to $101.46 billion. As the meme coins crash, will Dogecoin find a crossroads for a bullish turnaround? Or is the downfall ready to break the $0.30 crucial support?
Dogecoin Warns 4-month-old Trendline Breakdown
In the daily chart, the Dogecoin price action reveals a sideways trend despite the short-term volatility. Currently, the Dogecoin price is testing the crucial approaching support trendline as it fails to sustain above the $0.40 supply zone.
With four consecutive bearish candles, Dogecoin is trading at a market price of $0.34128. The short-term downfall is threatening a pullback to the $0.30 psychological zone.
This will break below the support trendline and increase the chances of a bearish continuation. However, the daily RSI line sustains near the halfway level, reflecting minor bullish support.
The MACD and signal lines are on the verge of giving negative crossovers. Hence, the momentum indicators maintain an opposing viewpoint.
Based on the trend-based Fibonacci levels, the downfall is likely to test the crucial support at the $0.30 mark. As the daily RSI line reveals a bullish divergence, a reversal rally will re-challenge the $0.40 psychological zone near the 23.6% Fibonacci level.
In case of a breakout rally, the uptrend could reach the 50% Fibonacci level near the $0.50 psychological mark. Optimistically, the uptrend could scale to the 1.618 Fibonacci level at $0.9135.
On the flip side, the crucial support levels are $0.26 and $0.19.
Bearish Speculations Hit the Ceiling
As the Dogecoin price remains in a free fall, the bearish speculations are on the rise. The Dogecoin open interest is down by nearly 9% to $4.66 billion.
Furthermore, the long-to-short ratio is down to 0.9305, reflecting a rising number of bearish positions. The long liquidations over the past 24 hours have reached $18.67 million, with a drop in funding rate to 0.0098%.
Thus, the key derivative data points reflect a strong bearish sentiment among the Dogecoin traders. Despite the downfall in the Dogecoin crisis, the Dogecoin network is witnessing a surge in activity.
Whales Are Active on Dogecoin Network
In a recent X post by Ali Martinez, the data from Santiment reveals a surge in the number of transactions and a number of whale transactions. Over the past 24 hours, the transactions over the Dogecoin network worth more than $1 million have reached 588 transactions.
This reveals a boost in network activity, which could help in the absorption of rising supply.
Historical Returns Put Dogecoin on a Needle Point
Based on the historic market returns, Dogecoin has given an average return of 84% in January months. Compared to the mildly bullish years, Dogecoin has given a return of more than 15%, as the current monthly return stands at 8.22%.
The uptrend is likely to continue as the short-term downfall subsides. However, a broader market pullback will likely mark a bearish monthly closing of between –10% to –20%.
Conclusion
Dogecoin’s price action remains at a critical juncture, with support near $0.30 holding the key to future trends. While bearish momentum dominates in the short term, increased network activity and historical seasonal trends could provide the foundation for recovery if broader market sentiment improves.
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