Why Dogecoin Price is Down Today: A Closer Look at the Bearish Trend

Dogecoin (DOGE) has experienced a noticeable decline, falling over 6% in the last 24 hours to trade at $0.226. This price drop comes amid broader bearish sentiment in the memecoin sector and is reflective of the current correction following its impressive rally in late 2024.

Dogecoin’s Recent Market Performance

Dogecoin, which soared more than 525% between August and December 2024, reached its second-highest price peak of $0.484 in December. However, it has since lost more than 50% of its value, a trend that continued today. This downturn is a part of a larger correction in the bull market, which had fueled optimism and speculative activity surrounding Dogecoin.

Despite its bullish run in late 2024, Dogecoin’s price has struggled in recent months, and technical indicators, as well as on-chain data, suggest that further declines are possible in the near future.

Memecoin Market Woes: A Broader Downturn

The drop in Dogecoin’s price is not an isolated event but part of a larger downturn in the memecoin sector. Key memecoins such as Shiba Inu (SHIB), Pepe (PEPE), and Bonk (BONK) have also seen significant losses.

• Shiba Inu (SHIB) has fallen by 5.60%, trading at $0.0000151.

• Pepe (PEPE), an Ethereum-based memecoin, dropped by approximately 7.25%.

• Bonk (BONK), a Solana-based token, posted the biggest loss among the top memecoins, falling by 7.55%.

This broad-based sell-off has wiped out over $4.11 billion from the total market capitalization of memecoins in just the last 24 hours. A significant part of the reason behind this decline stems from rug-pull scams, which have caused many investors to lose faith in the memecoin market.

North Korea’s Lazarus Group and the Impact of Rug-Pull Scams

According to blockchain investigator ZachXBT, North Korea’s Lazarus Group is likely behind a series of recent rug-pull scams involving memecoins, particularly those built on Solana. These scams, which involve malicious actors exiting a project after drawing in investor funds, have left many traders and investors with significant losses.

As a result, some investors have chosen to exit the memecoin market altogether, shifting their capital elsewhere. Dogecoin, like other memecoins, thrives on hype and optimism, and a string of scams can rapidly turn sentiment negative, leading to diminished speculative capital flowing into these tokens.

Declining Dogecoin Network Activity

The downturn in Dogecoin’s price also corresponds with a sharp drop in network activity. Dogecoin’s whale transactions, which involve transfers of over 1 million DOGE, have dropped to 66 in February—its lowest count in four months. This decline in large transactions mirrors a broader trend of reduced demand for Dogecoin, as reflected in lower transaction volumes.

When transaction volumes fall, it often signals a reduced interest in using or trading a token, which can lead to weaker price support. If this trend continues, Dogecoin may struggle to regain bullish momentum unless new catalysts emerge.

Declining Open Interest (OI) and Low Funding Rates

Further reinforcing the bearish sentiment, Dogecoin’s open interest (OI) has dropped significantly. OI measures the number of outstanding derivative contracts in the market, and a decrease in OI suggests waning interest in high-leverage trading. As of February 24, Dogecoin’s OI stood at $2.21 billion, down from its peak of $5.42 billion over a month ago. This drop, coupled with low funding rates, indicates that traders are adopting a more cautious approach toward Dogecoin, which adds to the overall bearish market sentiment.

What’s Next for Dogecoin?

Dogecoin’s technical indicators also suggest potential further downside. The 50-week exponential moving average (EMA) at $0.2197 serves as Dogecoin’s immediate support level. If the price falls below this level, the next key support could be at $0.1459, based on the 0.786 Fibonacci retracement level, marking a decline of over 35% from its current price.

The Relative Strength Index (RSI) is at 46.16, indicating neutral momentum. If the RSI dips below 40, it could signal further downward pressure.

To reverse this bearish trend and regain momentum, Dogecoin would need to break past the 0.5 Fibonacci retracement level at $0.2670 and establish it as a new support level.

Conclusion

Dogecoin’s recent price decline is part of a broader trend in the memecoin market, which has seen a sharp sell-off due to factors such as rug-pull scams, declining network activity, and reduced trading interest. If the bearish trend continues, Dogecoin may face further declines in the short term, with the possibility of a 35% drop from current levels.

As always, the market remains speculative, and future price movements will depend on new catalysts or changes in investor sentiment. However, for now, Dogecoin faces a tough road ahead, particularly with the ongoing risks in the broader memecoin sector.