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- Dogecoin dropped below $0.09 after heavy liquidation of leveraged long positions.
- Futures traders reduced exposure, pushing open interest to multi-month lows.
- Spot market accumulation continues, offering a potential path to recovery.
Dogecoin (DOGE) extended its decline as weakness across the broader cryptocurrency market pushed the popular memecoin below a major support level. After slipping under $0.09, DOGE fell as low as $0.081 before recovering slightly. At the time of writing, the token was trading near $0.085, reflecting continued selling pressure and growing uncertainty among traders.
The latest decline marks one of Dogecoin’s weakest performances in recent months and has intensified concerns about the asset’s short-term outlook.
Long Liquidations Accelerate the Downtrend
A significant factor behind the latest drop was the liquidation of leveraged positions. As prices fell, long traders bore the brunt of the damage, with approximately $5.3 million in bullish positions wiped out. Total liquidations reached roughly $6.4 million.
When leveraged longs are forced out of the market, exchanges automatically close positions to limit losses. This process often creates additional selling pressure, which can accelerate price declines and deepen market volatility.
The liquidation wave also sparked panic among futures traders, many of whom rushed to exit positions amid fears of further downside.
Futures Traders Turn Defensive
Market data showed a notable imbalance in futures activity, with outflows exceeding inflows. This resulted in a negative futures netflow, signaling that traders were reducing exposure rather than opening new positions.
At the same time, Dogecoin’s open interest fell to its lowest level since March, indicating a sharp reduction in speculative activity. Falling open interest combined with negative netflow often reflects weakening confidence and a more cautious market environment.
The shift suggests that many traders are choosing to stay on the sidelines until clearer signs of stability emerge.
Spot Buyers See Opportunity
Despite the bearish sentiment in derivatives markets, some investors appear to be taking advantage of lower prices.
Spot market activity remained relatively strong, with exchange netflows staying negative for several consecutive days. Negative netflows generally indicate that buyers are moving tokens off exchanges, a sign of accumulation rather than selling.
This buying interest may help absorb some of the pressure created by futures liquidations, though it has not yet been strong enough to reverse the broader downtrend.
Technical indicators suggest that sellers remain firmly in control. Dogecoin’s Relative Strength Index (RSI) recently entered oversold territory, highlighting the intensity of the recent sell-off.
Also Read: Dogecoin Gains Institutional Pathway as House of Doge Teams Up With Paxos
If bearish momentum continues, DOGE could face another test of the $0.08 level and potentially move lower. However, if futures market panic eases and spot demand continues to grow, the memecoin could attempt a recovery toward $0.094 and eventually challenge the psychologically important $0.10 mark.
For now, Dogecoin remains caught between aggressive sellers and bargain hunters looking for value after the sharp decline.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
