Dogecoin (DOGE) price has slipped to test a multi-month support level of $0.20 after the broader crypto market retraced, causing a record $880M in liquidations within 24 hours. The decline in DOGE price forced the closure of many long positions, leading to a drop in open interest. As bearish headwinds continue, can Dogecoin price recover, or is a crash to $0.10 imminent?
At press time, DOGE trades at $0.21 after a 9% drop in 24 hours. The meme coin is now down by 40% in one month.
Dogecoin Open Interest Hits 15-Week Low – Will Price Drop to $0.10?
Data from Coinglass shows that Dogecoin’s open interest, which is the total number of open derivatives contracts, has fallen by 13% in 24 hours to $1.9 billion. This metric is now at the lowest level since November.
Dogecoin Open Interest
The decline in open interest may have been caused by a surge in long liquidations. This is because, in the last 24 hours, more than $27M long positions on DOGE were forcefully closed after the drastic price decline.
When long traders are forced to close their positions, it causes the price to drop even further due to additional selling pressure.
Going by past trends, Dogecoin price tends to rise when the open interest rises and falls when this metric declines. If derivative traders become hesitant and fail to open new positions causing the open interest to drop further, Dogecoin may likely drop to $0.10.
DOGE Price Struggles as Bearish Headwinds Intensify
Dogecoin price dropped to test a multi-month support level of $0.201 on Tuesday, marking the third time that it has tested this level since November. Buyers quickly stepped in to buy DOGE at this price, but the selling pressure is still strong.
The Relative Strength Index (RSI) on the one-day chart shows that bears have the upper hand after falling to 27. An oversold RSI shows that the market is strongly bearish, and while it may signal a potential rebound due to seller exhaustion, the lack of a positive catalyst suggests that the bearish momentum may persist.
DOGE/USDT: 1-day Chart
The 20-day Exponential Moving Average (EMA) has also dropped below the 200-day EMA, which further reinforces the bearish thesis. If these bearish conditions continue, DOGE price may likely drop to $0.09. At the same time, key resistance lies at the 200-day EMA of $0.25.
The hourly chart also portrayed a bearish Dogecoin price prediction after breaking below a symmetrical triangle pattern. According to trader Ali Charts, this breakout may lead to DOGE price breaching support of $0.201 and falling to $0.197.
DOGE/USDT: 1H Chart
Amid these bearish signals, it is likely that DOGE could extend the downtrend and fall to $0.10. However, if the broader market recovers, can Dogecoin’s trend reverse?
Is a Dogecoin Price Recovery Looming?
Despite the current bearish outlook, some analysts remain bullish on Dogecoin and anticipate that the price could recover if certain conditions are met. Per analyst Carl Moon, if Dogecoin can survive the current market conditions and successfully defend support, it may break out from a falling wedge pattern to target $0.44.
DOGE/USDT: 1-day Chart
The analyst pointed out similar breakouts from the past that preceded a rally. Nevertheless, a resumption of bullish trends is currently dependent on how the rest of the crypto market performs.
The post Dogecoin Price Slips as Open Interest Falls to 15-Week Low – Is a Crash to $0.10 Imminent? appeared first on CoinGape.
