Can Dogecoin Bounce Back from This Decline?

Dogecoin (DOGE) has faced challenges in the cryptocurrency market. Initially bullish, DOGE has struggled to maintain gains, leading to significant losses for traders. In the last week, the altcoin experienced a price drop of 9.63%, with a daily decrease of 2.54%. Its monthly gains have dwindled to just 4.95%, indicating a growing lack of confidence among traders.

The Role of Volume Spikes

DOGE is currently in a downturn due to a sharp increase in transaction volumes and rising exchange netflow. When more Dogecoin enters exchanges than is withdrawn, it creates an oversupply, which tends to push prices down.

Data shows that netflow for DOGE surged by $135.2 million over the past week, reflecting a strong trend of selling among investors. This influx of supply has pressured the price, creating challenges for those holding long positions.

As of writing this article dogecoin was trading at $0.11 with 3.56% Increase in last 24 hours as per Coinpedia markets data

Increased Transactions Point to Sell-Off


Source : Coinglass

There has also been a significant uptick in large transactions. Over the past 24 hours, 1.56 thousand large transactions were recorded, peaking at 1.58 thousand during the week. Such high trading activity often correlates with investor panic, suggesting many are eager to offload their holdings.

Diminishing Market Interest

The market's response to these trends has been telling. DOGE's trading volume has dropped by 33.94%, signaling waning interest. Engagement in derivative trades has also decreased, further indicating a lack of confidence.


Source : Coinglass 

The Open Interest metric, which reflects active contracts, has fallen by 7.41% over the last 24 hours, now standing at about $509.53 million. This decline reinforces the notion that traders are stepping back from DOGE.

Liquidation and Losses

These factors have led to the liquidation of over $4.16 million in long positions. Traders who bet on DOGE regaining previous highs have faced substantial losses, adding to the overall atmosphere of uncertainty.

What Lies Ahead for Dogecoin?

Given current market conditions, DOGE's price may continue to face downward pressure. The trends of increased selling, diminished interest, and liquidation of long positions paint a concerning picture for the memecoin's future.

For those interested in a deeper dive into Dogecoin price prediction and potential recovery strategies, stay tuned for our detailed analysis.

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