- Dogecoin price fell to $0.40 on Tuesday, down 16% on the day.
- DOGE open interest fell by $380 million as traders reacted to the failed $0.50 breakout on Monday.
- Technical indicators show DOGE price moving below its 20-day average, signaling a prolonged decline in market demand.
Dogecoin price continues to consolidate below the $0.40 level on Tuesday, down 16% on the daily time frame.
After several failed attempts to surpass $0.50 over the past week, speculative traders have decided to reduce their DOGE positions.
Is the Dogecoin price at risk of a major correction phase?
Dogecoin price fell $0.40 amid profit-taking frenzy
Closing out the month with gains of 175%, Dogecoin became one of the best-performing mega-cap crypto assets in November.
After prices peaked at $0.45 around November 22, DOGE struggled to gain traction as traders began to take profits.
The global crypto market received a major boost on Monday from several bullish catalysts ranging from Microstrategy’s $1.4 billion purchase of BTC to WisdomTree’s filing for the Ripple ETF (XRP).
Dogecoin (DOGE) price compared to Bitcoin (BTC) price | December 3, 2024
However, while XRP, Monero (XMR) and Litecoin (LTC) tops the ranking of top gainers, Dogecoin and Bitcoin prices remained moderate below the $0.50 and $100,000 thresholds respectively.
Dogecoin price fell sharply by 16% to $0.40 at press time on Tuesday, after peaking at $0.45 during Monday’s rally.
The chart above shows how Dogecoin mirrored Bitcoin’s 5% decline over the past 24 hours.
Dogecoin Traders Withdrew $380 Million After Failed $0.50 Breakout
After hitting a 3-year high of $0.48 on November 23, Dogecoin price did not advance further.
And after a week of stagnation, short-term traders are preparing to reduce their DOGE positions.
Lending credence to this narrative, Coinglass’ open interest chart below tracks the value of active Dogecoin futures contracts, to provide insight into how traders react to key market events.
Dogecoin Price vs. DOGE Open Interest | Source: Coingecko
The chart above shows that DOGE open interest increased from $3.88 billion to $3.50 billion in the last 24 hours.
This recorded outflow of $380 million represents a 10% drop in total capital actionwhile the price of Dogecoin fell by over 16% during the same period.
When the price of an asset falls faster than open interest, it is often an indication that traders are quickly closing their long positions.
As bulls lose confidence in DOGE’s near-term recovery potential, the $0.40 support could come under threat in the days to come.
DOGE Price Prediction: $0.40 Support at Risk
Dogecoin continues to emit bearish signals as bulls struggle to hold the $0.40 support level.
Donchian Channel (DC) DOGE is currently trading below the midline ($0.41), signaling increasing bearish momentum. A multi-day close below $0.41 could trigger further declines towards the next key support level at $0.34.
Dogecoin Price Forecast | DOGEUSDT
Volume Delta data shows a net negative figure of -89.44 million, indicating stronger selling pressure relative to buying activity.
This imbalance reinforces the possibility of a bearish continuation. A break below $0.40 could trigger additional liquidations, accelerating losses towards the $0.34 support zone.
Conversely, if DOGE manages to hold $0.40 and climb above $0.45, the bulls could attempt to force a retest of the psychological resistance of $0.50.