Dogecoin price falls, $15m liquidated: will it go back up?

Dogecoin Drops Amidst Cryptocurrency Market Concerns

Dogecoin (DOGE), the leading meme coin in the crypto market, experienced a 6% decline on January 8, reaching its lowest point in nearly a week at $0.3415.

This drop was accompanied by a surge in trading volume, with tokens worth $5.26 billion exchanged, compared to $3.3 billion on Tuesday. This suggests increased selling pressure from investors liquidating their positions.

Liquidations have also surged, with $20 million worth of bullish positions liquidated on Tuesday and nearly $15 million on Wednesday. Large liquidations often result in sharp price declines as leveraged positions are forcefully closed.

Dogecoin's weighted funding rate remains positive, indicating reduced demand for long positions. This reflects caution among investors as cryptocurrency prices retreat amidst rising US bond yields.

Despite the setbacks, some analysts remain optimistic about Dogecoin's prospects. Bitcoin, which often influences broader market trends, remains in a bullish trend and has formed a bullish pennant pattern, suggesting potential gains ahead.

Historical data shows that Dogecoin has exhibited similar price movements in previous years. After a rally in November 2023, there was a subsequent drop, consolidation, and recovery in 2024. Analysts believe a similar pattern may unfold in 2025.

Dogecoin Price Analysis

DOGE has retreated in recent weeks, hovering above the 38.2% Fibonacci retracement level and moving averages.

The Percentage Price Oscillator indicator suggests bullish momentum.

DOGE may potentially rebound to its previous high of $0.4830, representing a 43.50% gain. Alternatively, a decline to the December low of $0.2630 remains possible.