Dogecoin price continued its strong downward trend this week, reaching its lowest level since February this year. DOGE dropped below the crucial support level at $0.0845, down by 82% from its highest point last year. So, will the DOGE token continue its downtrend or rebound soon?
Dogecoin Price Has Crashed as Meme Coin Demand Waned
DOGE token has been in a strong sell-off in the past few months, coinciding with the broader crypto market crash that has affected Bitcoin and other altcoins.
This crash happened as demand for the coin in the spot, futures, and ETF market continued to wane. Data shows that spot Dogecoin ETFs have had only a day of inflows this week. These funds have added just $662k inflows this month, down from over $2.15 million last month.
The same is happening in the futures market, where the futures open interest has been in a freefall. It dropped to $995 million, down from last year’s high of $6 billion. That is a sign that liquidity has continued falling. The daily volume has dropped to $1.4 billion from $20 billion in October last year.
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Dogecoin has also plunged because of the ongoing meme coin sell-off. Top meme coins that soared in January last year have all dropped by over 90% from their peak. This includes popular tokens like Shiba Inu, Dogelon Mars, Pepe, and Official Trump.
Macro factors have contributed to the Dogecoin price weakness. For example, there are signs that the Federal Reserve will hike interest rates in the coming months now that inflation has continued soaring. The headline CPI jumped to 4.2%, while the PPI jumped to 6.4%.
The coin has also slumped because of the ongoing AI boom that has pushed the stock market to the highest level on record.
DOGE Price Prediction: Technical Analysis
The weekly chart shows that the Dogecoin price has been under pressure, and technicals suggest that it has more downside to go. It has remained below all moving averages this year.
Worse, the coin has formed a bearish flag pattern, which is made up of a vertical line and an ascending channel. The Relative Strength Index (RSI) has dropped to 35 from last year’s 88.
Therefore, the token will likely continue falling as sellers target the next key support level at $0.057, its lowest point in September 2023. This target is about 31% below the current level.
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