Dogecoin's price has dropped significantly, falling 32% over the past three days and 20.70% in the last 24 hours alone. This decline comes as Bitcoin saw an 11.25% drop, triggering a broader crypto market downturn. Despite the plunge, the dip presents opportunities for short traders and investors looking to accumulate.
Key Metrics
Dogecoin's Total Value Locked (TVL) dropped 32.65% over three days, from $8.82 million on December 17 to $5.94 million. Open Interest (OI) in DOGE has also fallen by nearly 50%, from $4.34 billion when DOGE was at $0.45 to $2.26 billion with the price now at $0.28. Technical indicators show DOGE is in the oversold zone with an RSI of 30.15. While trading below moving averages (MA 20 and 50), it has support near $0.27 due to the MA 100, with the MA 200 at $0.17.
Whale Activity and Risks
Whale orders and trade data reveal a risky trading environment for DOGE. Many short trades have been executed, suggesting the potential for a sudden upward price movement to liquidate high-leverage positions. However, traders must exercise caution and use proper risk management.
Future Outlook
Dogecoin's price trends closely follow Bitcoin. As BTC tries to recover, DOGE may mirror this pattern. New buying activity could push prices upward, but further declines remain possible. The BTC-driven ripple effect has contributed to DOGE's current downturn. In uncertain market conditions, avoiding leverage trading is advisable, though dollar-cost averaging presents opportunities for long-term investors.
