TLDR
- Dogecoin (DOGE) has fallen approximately 22% from recent highs of $0.171, with $37.15 million in liquidations (85.78% being long positions)
- Technical analysis shows DOGE broke below a long-standing ascending parallel channel that guided prices since 2018
- Social media engagement and daily active addresses have declined significantly, indicating waning interest
- Analysts forecast potential further drops to support levels at $0.131, $0.102, and possibly as low as $0.06167
- A bullish divergence on the RSI hints at possible recovery, though the overall trend remains bearish
Dogecoin has experienced a sharp 22% price decline from Saturday’s high of $0.171, triggering $37.15 million worth of liquidations across exchanges. Long positions accounted for 85.78% of these liquidations, totaling $31.87 million.
The price drop coincided with broader market movements as Bitcoin shed 10.68% of its value following global market reactions to trade war developments.
Technical analysis reveals DOGE broke below a long-standing ascending parallel channel that had guided its price since 2018. This breach marks a critical technical shift that could signal continued downward pressure.
#Dogecoin $DOGE is breaking out of an ascending parallel channel, signaling a potential move toward $0.060! pic.twitter.com/p4nclPILNr
— Ali (@ali_charts) April 7, 2025
The breakdown also came after rejection at the 0.786 Fibonacci retracement level located at approximately $0.16395, further strengthening the bearish case.
Declining On-Chain Activity and Social Engagement
On-chain metrics paint a concerning picture for the popular memecoin. Daily active addresses, which saw a significant uptick in November, have since fallen to levels maintained since January.
A brief surge in activity occurred in mid-March but quickly tapered off, suggesting diminishing user interest in the network.
Social dominance and social volume metrics have similarly tracked downward, reaching new lows in April. This trend indicates that attention and capital flows may continue to leak out of the market unless the price trend reverses.
The correlation between price action and social metrics was highlighted on March 12, when a 20% price bounce from local lows coincided with a surge in social dominance and daily active addresses.
Technical Outlook and Support Levels
The funding rate for DOGE has entered negative territory after a week of bullish attempts, creating favorable conditions for sellers. However, it’s worth noting that historically, the price has tended to bounce higher in the short term whenever the funding rate has turned negative.
#Dogecoin has back-tested a key level from its previous Consolidation Range 🔥$Doge Army! The harder the battle, the sweeter the victory.
Are you ready for $Doge to hit a dollar? pic.twitter.com/Wdk8bOA6wi— Trader Tardigrade (@TATrader_Alan) April 7, 2025
The one-day chart shows steady selling pressure since December, with the On-Balance Volume (OBV) indicator slowly but steadily declining. The Relative Strength Index (RSI) has remained below the neutral 50 level since mid-January, confirming the bearish trend.
Support levels from October 2024 at $0.131 and $0.102 now serve as the next price targets. The $0.131 level has been tested in recent hours and could yield a bounce to the $0.154-$0.164 range.
Whale Activity and Recovery Potential
Adding to market uncertainty, a whale recently transferred 300 million DOGE (valued at around $41.7 million) to Binance exchange, potentially signaling preparation for a sell-off.
Despite the overwhelmingly bearish indicators, some analysts have identified a bullish divergence on the daily chart. This pattern emerges when price posts lower lows while the Relative Strength Index bounces and posts higher lows, suggesting selling momentum may be weakening.
DOGE is currently testing the $0.135 price level, which has historically acted as both support and resistance throughout early 2023. If this level holds, it could mark the beginning of a recovery phase.
For any meaningful reversal to occur, analysts suggest DOGE would need to reclaim the $0.18 level. A break above this threshold could target further resistance at $0.25 and $0.30.
However, in a more bearish scenario, analysts forecast a potential drop to the 0.618 Fibonacci retracement level around $0.06167, representing a nearly 59% decline from recent highs.
The three-month bias indicator signals that both bulls and bears have equal dominance over the memecoin, reflecting the uncertain market sentiment.
Despite the potential for a 15% bounce from current levels, the overall trend remains firmly bearish in the near term, with technical breakdowns outweighing the limited bullish signals.
As with all cryptocurrency investments, traders and investors are advised to exercise caution given the current market volatility and technical outlook for Dogecoin.
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