Will the Dogecoin (DOGE) price hold the fort at the $0.30 psychological mark as meme coins lead the market crash?
Over the past week, the total crypto market cap has dropped by 11.53% to $3.2 trillion. Amid the massive crash, meme coins witnessed a downfall from a peak of $120 billion to the current valuation of $93.26 billion.
Among the top meme coins, Dogecoin DOGE $0.32 24h volatility: 1.4% Market cap: $46.77 B Vol. 24h: $4.36 B took a 22% hit, dropping to $0.3135. It currently has a market cap of $46.18 billion and has recorded a 32% downfall over the past 30 days.
Amid such bearish conditions, Dogecoin’s crucial support at $0.30 remains solid. Will Dogecoin leap into bullish action as Bitcoin holds the fort at $95K?
In the daily chart, the DOGE price action showcases a bullish failure to hold the rising channel pattern. With a bearish engulfing candle on December 9, the DOGE price fell by 11.13%, resulting in a breakdown rally. The breakdown rally extended to a $0.30 psychological mark amid the broader market correction.
Currently, the DOGE price is fluctuating between the 50-day EMA line and the 100-day EMA line. With rejections from the dynamic levels, the meme coin consolidates over the weekend. Currently, Dogecoin is trading at $0.3141 with a minor growth of 0.5%.
Photo: TradingView
Amid the consolidation, the daily RSI line has flattened slightly above the oversold boundary level. This increases the chances of a reversal if the meme coin regains momentum.
Furthermore, the recovery run is trading close to a long-coming support trendline. This adds to the underlying support for Dogecoin, increasing the chances of upside.
Based on the price action levels, Dogecoin’s immediate resistance is $0.38 and the $0.40 psychological mark. Conversely, a breakdown below the support elements of the local trendline and the 100-day EMA line could drop to the 200-day EMA at $0.2198. Hence, in the current situation, the downside risk for Dogecoin remains nearly 30%.
Despite the increase in price volatility in the short term, the larger trend anticipates a parabolic rise. In a recent tweet by an independent technical analyst Ali Martinez, a rising channel in Dogecoin highlighted a similar pattern last seen in 2017 and 2021.
Photo: TradingView
Back then, Dogecoin began a parabolic run of 220%, retraced by 40%, and then rallied 5000%. This pattern repeated in 2021 when the Dogecoin price surged 476%, retraced 56% and then skyrocketed by 12,000%. With history potentially repeating itself, Dogecoin surged 240% in 2024 and has witnessed a retracement of 46%.
Considering the parabolic history, Dogecoin’s upside potential marks a price target of $20. While this target seems optimistic, the rising channel’s overhead trendline brings it under the bullish radar.
With the increase in price volatility last week, the Dogecoin open interest has dropped to $1.95 billion, crashing under the $2 trillion mark. This marks a lack of interest among Dogecoin.
Furthermore, the long-to-short ratio has turned bearish, dropping to 0.981. The liquidations over the past 24 hours in Dogecoin have reached $19.33 million.
With the bulls suffering $11.45 million in long liquidations, the bearish sentiments are on the rise. Further adding to the declining sentiments, the Dogecoin OI-weighted funding rate has dropped from 0.0497% to 0.0053%.
The OI crash and drop in funding rates reveal a massive turnaround in derivative sentiments, with sellers taking control. Hence, the short-term derivatives market is extremely bearish, with sellers anticipating that the trend will continue.
However, the technical signals and historical patterns are projecting a bounce-back rally, and with the market as a witness, the meme coins are known for their high fluctuations. Hence, the ongoing correction could be considered healthy if it sustains above the support trendline.
In short, optimistic buyers could find the dip as a potential entry opportunity.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
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Vishal, a Bachelor of Science graduate, began his journey in the crypto space during the 2021 bull run and has since navigated the subsequent market winter. With a strong technical background, he is dedicated to delivering insightful articles rich in technical details, empowering readers to make well-informed decisions.
