Dogecoin Experiences Significant Price Drop

Dogecoin Experiences Significant Price Drop

Dogecoin experienced a notable price decline of 5% on May 28, reaching an intraday low of $0.16192. This drop surpassed the broader crypto market's decline of approximately 1.47% during the same period. The decline in DOGE follows Bitcoin's 3.2% drop in the preceding 24 hours. Despite recent gains, with an increase of over 7.5% in the last 30 days, DOGE has now fallen.

Causes of Dogecoin's Price Drop

Dogecoin's price began to decline between May 22 and May 26, and it now trades 2.5% below its value from a week ago. According to Coinglass, a blockchain data analysis platform, this decline coincides with a substantial 37% drop in open interest (OI) in futures contracts, decreasing from $1.67 billion in mid-April to $1.04 billion.

Furthermore, Dogecoin perpetual futures contracts' funding rate has decreased from 0.0243% on May 23 to 0.0118% on May 28. Declining funding rates and OI indicate bearish sentiment among investors, potentially amplifying selling pressure on DOGE.

Future Outlook for Dogecoin

The recent market-wide correction, resulting in millions of dollars liquidated, has also impacted DOGE, driving its price down to $0.1512. Notably, whale activity, characterized by large transactions of $100,000 or more in DOGE, has increased. IntoTheBlock reports that transactions between $100,000 and $1 million surged by over 28% last week, while transactions exceeding $1 million rose by more than 55% in the last 30 days. This surge suggests that institutional investors are cashing out profits, contributing to the ongoing correction.

The recent price drop in DOGE aligns with a bearish divergence between its price and the relative strength index (RSI) on the weekly timeframe. Despite DOGE's price reaching higher highs from April 15 to May 28, the daily RSI recorded lower levels, indicating a weakening uptrend and encouraging traders to secure profits.

IntoTheBlock's IOMAP model reveals support for DOGE at the $0.165 region and resistance in the $0.163 to $0.168 range. Approximately 97,980 addresses acquired around 7.03 billion DOGE within this range. Increased selling at this level could amplify downward pressure, potentially leading to a further price decline. The 50-day simple moving average at $0.10 represents the next significant support level.

The article was originally published on COINTURK NEWS: Dogecoin Experiences Significant Price Drop