Dogecoin plunges 8%, price action heralds brief technical rebound
Dogecoin fell sharply on Tuesday, down 8% to $0.1697, as whales sold $440 million worth of the token and trading volume surged to multi-week highs. A drop below $0.18 marks a decisive shift in market structure and confirms the continued diversification of institutional investors into the Dogecoin space.
news background- Dogecoin (DOGE) fell from $0.1843 to $0.1697 in 24 hours, breaking multiple support levels and setting a new monthly low. Trading volume soared to 3.37 billion pieces, 426% higher than the average daily trading volume, and the superimposed effect of stop-loss orders accelerated the decline.
- The collapse was caused by a failure to hold the 0.236 Fibonacci retracement level at $0.1787, triggering liquidation flows and algorithmic selling.
- Bears continued to take control by mid-day, pushing Dogecoin (DOGE) to an intraday low $0.1641 before limited dip buying emerged.
- Market capital flows completely turned negative, with on-chain data showing daily capital outflows of US$22.27 million, while futures turnover increased by 50% to US$5.25 billion, although open interest fell by 4% to US$1.67 billion - indicating a general deleveraging in the market rather than new speculative demand.
Price action summary- A break below $0.18 marks a structural failure in a support area that has held since early October. Sellers absorbed the buying on every bounce, confirming the descending channel continuation pattern.
- Intraday data shows that the selling was most intense between 03:00 and 05:00 UTC time, with peak trading volume exceeding 1 billion tokens.
- Attempts to return to the $0.1760 resistance were immediately rejected. The final close was near the lower quarter of the trading range, underscoring institutional investors' continued grip on the market.
technical analysis- The whale's behavior further exacerbated the bearish situation. Addresses holding between 10 and 100 million DOGE sold approximately 440 million tokens in three trading days, one of the largest liquidations of mid-sized wallets this quarter.
- Momentum indicators confirm the risk of short-term capitulation: the RSI fell to 34.7, approaching oversold territory, which historically has tended to herald a rebound.
- However, the formation of the descending channel remains intact, indicating that the price may extend towards the demand zone of $0.165 to $0.150, where the previous price accumulation occurred.
What traders should know- DOGE’s near-term outlook hinges on stabilizing above $0.165. Analysts noted that the coin’s recent pattern of single-day losses of 6% to 9% typically signals a short-lived technical rebound, but for a sustained recovery to occur, a daily close above $0.18 to $0.185 would be necessary to offset the downward momentum.
- Short-term traders believe that unless overall risk sentiment improves, a price rebound towards $0.1760 to $0.1800 will be a distribution opportunity.
- With whale flows negative and leverage being unwound, short-term volatility remains biased to the downside until volume contraction confirms capitulation.
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