The value of Dogecoin (DOGE) has been struggling to maintain its positive momentum in the crypto market, experiencing a rapid decline in gains over the past month. The altcoin witnessed a decrease of 9.63% and 2.54% in its weekly and daily prices, respectively, leading to a significant reduction in its monthly profits to just 4.95% as well.
Recent patterns indicate that the drop in DOGE’s price could be linked to a noticeable decrease in traders’ confidence, a trend that is likely to persist in the near future.
Increased Trading Volume and Supply Surge Impact DOGE’s Downturn
Presently, DOGE is undergoing a downturn primarily driven by a substantial spike in large transaction volumes and a rise in exchange netflow.
A positive exchange netflow, as seen with DOGE, signals a significant inflow of the cryptocurrency into exchanges surpassing the outflow, which can lead to a considerable increase in supply, thereby causing a price decline.
Data analysis from IntoTheBlock revealed an increment of 135.2 million DOGE in netflow over the past week, indicating active selling by investors.
This selling pressure coincided with an increase in large transactions, with 1.56 thousand transactions recorded in the last 24 hours alone. The highest transaction count in the past week peaked at 1.58 thousand.
Under these circumstances, the chances of DOGE’s price continuing to fall appear highly probable.
Market Downturn Intensifies as DOGE Confronts Steep Descent
Furthermore, the trading volume for DOGE plunged by 33.94%, signaling a sharp decline in market interest. Derivative trades have also witnessed decreased participation recently.
The Open Interest indicator by Coinglass, reflecting the attractiveness of DOGE to traders, has mirrored this decline. Over the previous 24 hours, Open Interest decreased by 7.41%, amounting to $509.53 million.
Simultaneously, this decline resulted in the liquidation of long positions in DOGE worth over $4.16 million, causing significant losses for traders who bet on DOGE surpassing its previous market levels.
These metrics collectively indicate a diminishing interest in the asset, with bearish sentiments likely to dominate the market. Following these developments, CryptoCrypto explored potential scenarios for DOGE in the market.
Projections for DOGE Amid Market Volatility
As of now, DOGE appears to be approaching two crucial price targets following its inability to surpass the resistance level at 0.12862 within its consolidation channel.
There is a high probability that DOGE could retreat to the support level at 0.09878 within the channel in the immediate future. However, a break below this support could lead to further declines.
If such a scenario unfolds, the next target for DOGE might be as low as $0.08050. Subsequent decreases could materialize if on-chain data continues to support bearish sentiment among traders.