Dogecoin price has retreated for two consecutive days as sentiment in the crypto industry has deteriorated.
Dogecoin (DOGE), the largest coin in the cryptocurrency market, fell 6% on January 8, hitting a low of $0.3415, its lowest level in almost a week.
This decline occurred in a high volume environment, with tokens worth $5.26 billion changing hands, compared to $3.3 billion on Tuesday. The increase in trading volume suggests that some investors have started to liquidate their positions.
Dogecoin’s decline has triggered a significant increase in liquidations. Bullish positions worth $20 million were liquidated on Tuesday, followed by nearly $15 million on Wednesday. These liquidations are the largest since December 19. When large liquidations occur, it often results in a sharp drop in prices because leveraged bullish trades are automatically closed by exchanges.
Other data shows that Dogecoin’s weighted funding rate has remained positive, indicating reduced demand for long positions. It also reflects increased caution as cryptocurrency prices retreat amid surge in US bond yields.
The chances of the Securities and Exchange Commission accepting a DOGE ETF this year have remained low. According to Polymarketthose ratings fell 13% to 36% on Wednesday.
Nonetheless, some analysts expect Dogecoin price to rebound. As we wrote earlier, Bitcoin, which often determines broader crypto market trends, remains in a strong bull market and has formed a bullish pennant pattern, which usually signals further gains to come.
In an article on a consolidation phase and a subsequent recovery in 2024.
Dogecoin price analysis
Dogecoin price has retreated over the past few weeks, dropping from a December high of $0.4830 to $0.34. Despite the decline, it remains above the 38.2% Fibonacci retracement level and the 50-day and 100-day moving averages.
The Percentage Price Oscillator indicator has turned bullish, with its histogram remaining above the zero line.
Given these factors, DOGE will likely remain in this range before potentially rebounding to last year’s high of $0.4830 in the current quarter. Such a move would represent an increase of 43.50% from the current level. However, an alternative bearish scenario could see the coin fall to $0.2630, the December 20 low.