A surge in high-volume trades and an increase in FX net flows indicate an increasing lack of confidence Traders holding long positions are suffering heavy losses and their profits are being wiped out
Dogecoin (DOGE) has struggled to maintain bullish momentum in the market, with the memecoin quickly losing this month’s gains. In fact, the weekly and daily price of the altcoin fell by 9.63% and 2.54% respectively, reducing the monthly increase to just 4.95%. Too.
However, recent trends suggest that this decline in DOGE value may be caused by an apparent decline in trader confidence. And this is likely to continue.
Rapid increase in volume and increased supply causes DOGE decline
Currently, DOGE is at the end of a slump, mainly due to a significant spike in large transaction volumes and an increase in net flows on exchanges.
When an exchange has positive net flows, like DOGE, it indicates large inflows of cryptocurrencies to the exchange, far outweighing outflows. This position could significantly increase supply and cause prices to fall.
Netflow added 135.2 million worth of DOGE over the past week, according to detailed data from IntoTheBlock. This shows that investors are actively selling.
Source: Coinglass
This decline has been accompanied by an increase in large trades, with 1.56 million trades recorded in the past 24 hours alone. In fact, the highest number of transactions in the past week reached 158,000.
Considering these market conditions, DOGE prices are likely to continue to decline.
DOGE faces significant decline, market downturn intensifies
Furthermore, DOGE’s trading volume plummeted by 33.94%, indicating a sharp decline in market interest. Derivatives trading has similarly seen a decline in engagement recently.
The open interest indicator by Coinglass, which measures DOGE’s attractiveness to traders, reflects this decline in value. At the time of writing, open interest decreased by 7.41% over the past 24 hours to $509.53 Million.
Source: Coinglass
At the same time, this economic downturn led to the liquidation of over $4.16 million of long positions in DOGE. Traders who bet on DOGE above previous market levels faced significant losses.
Collectively, these indicators suggest that the bears are poised to dominate the market and that interest in the asset is waning. Following these developments, AMBCrypto investigated DOGE’s next possible position in the market.
DOGE’s next potential level amid market turmoil
At the time of writing, DOGE appeared to be facing two major price objectives on the chart as it failed to break out of the resistance at 0.12862 within its consolidation channel.
An immediate possibility is that DOGE will return to the channel support level at 0.09878. However, it is likely that DOGE will break below this support and fall further.
Source: Trading View
If this happens, DOGE’s next target could be $0.08050. Further declines could continue if on-chain indicators continue to support bearish sentiment among traders.
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