Dogecoin's open interest has plummeted by over $3 billion since January, currently standing at $1.91 billion, according to Coinglass data. This significant drop, reflecting the total value of outstanding derivatives contracts, indicates a decline in trader engagement with the meme coin.

Source: Coinglass

Concurrently, derivatives volume has decreased by approximately 30%, settling at $3.71 billion, further reinforcing a bearish market sentiment. This downturn, coupled with a broader market decline, has pushed Dogecoin towards the crucial $0.20 support level. Analysts, including Ali Martinez, warn that a breach of this support could signal the end of Dogecoin's bullish cycle. The combination of declining open interest and trading volume suggests traders are reducing their positions amidst market uncertainty.

Whales bought the dip, accumulating more than 530 million #Dogecoin $DOGE in the last 72 hours! pic.twitter.com/0cRGqxLoXw
— Ali (@ali_charts) February 27, 2025

Network activity metrics paint a concerning picture. New address creation has plummeted from 1.29 million in November to a mere 30,815, while active addresses have fallen from 2.66 million to 130,282. The inactivity of large Dogecoin holders ("whales"), historically influential in price movements, potentially exacerbates the selling pressure.

Dogecoin has formed a Bullish Divergence on RSI $Doge RSI Oversold area was also reached. pic.twitter.com/vwK2TAJrKX

— Trader Tardigrade (@TATrader_Alan) February 27, 2025

Despite the bearish indicators, some analysts maintain a positive outlook. Trader Tardigrade, for instance, suggests Dogecoin's price pattern mirrors its 2017 rally, predicting a rise above $1.7 after a period of consolidation. DOGECAPITAL shares a similar prediction, projecting a potential $1.7 target based on historical cycles observed in 2017 and 2021. While short-term forecasts lean bearish, these optimistic predictions suggest potential gains if market stability returns.

Source: Tradingview

Currently trading at $0.20723 USD, Dogecoin shows a 1.98% increase (+$0.00402) over the past 24 hours. However, this short-term gain is overshadowed by a significant 18.64% drop over the past week and a 37.93% decline over the last month. The longer-term picture reveals a 103.74% increase over the past six months and a 112.34% rise year-over-year, highlighting its past resilience.

Recently, Dogecoin experienced a sharp 15% drop within two days, falling below the critical 200-day Simple Moving Average (SMA) at $0.24 for the first time since October 2024. This breach signifies intensified selling pressure and a test of new support levels.

Technical Indicators and Market Sentiment

Dogecoin's downward momentum continues, with its price hovering near support levels around $0.19 – $0.20.

Source: Tradingview

A rebound from this zone could potentially trigger a short-term recovery, possibly targeting the $0.24 – $0.26 range. The RSI's approach to oversold conditions suggests a potential correction if buying pressure resurfaces.

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