Dogecoin price fell below $0.40 on Monday and has fallen 15% in the past seven days. Trading volume for major meme coins has fallen by $14.84 billion since Dec. 6, hitting a 40-day low of $5.29 billion on Sunday. DOGE open interest also decreased in the derivatives market, suggesting a growing lack of interest from short-term traders.
Despite Bitcoin prices hitting new all-time highs, Dogecoin prices fell below the $0.40 support on Monday and have fallen 15% in the past seven days. DOGE has struggled to find new buyers since hitting a three-year high on Dec. 9, according to key market data.
Dogecoin price drops 15% even as Bitcoin hits new all-time high
Dogecoin is struggling to recover from the crypto market crash caused by the geopolitical crisis that intensified last week. While investors took advantage of dovish macroeconomic conditions to push Bitcoin to all-time highs on Sunday, DOGE extended its losses further, raising major bearish concerns heading into the week ahead.
Dogecoin Price (DOGE) vs Bitcoin (BTC)
The chart above shows the divergence between Dogecoin's price movements and Bitcoin's price movements over the past week.
DOGE has fallen 15% over the past seven days, falling from $0.47 on December 9th to $0.39 as of press time on Monday.
Meanwhile, Bitcoin price is heading in the opposite direction. During this period, BTC rose 14.2% to hit an all-time high of $106,648, leading the crypto market resurgence.
Dogecoin demand fluctuates amid Bitcoin rise
When a supercap asset like Dogecoin breaks away from the overall market uptrend, it signals an active bearish catalyst within.
A closer look at the underlying market data shows that DOGE has struggled to find new buyers since hitting a three-year high on Dec. 9.
In support of this stance, the Coinglass chart below shows DOGE's daily spot trading volume and open interest flow.
DOGE spot trading volume plunges 74%
The Coinglass data below highlights worrying trends in Dogecoin's daily spot trading volume and open interest flow.
Dogecoin’s spot trading volume soared to $20.1 billion on December 6th. However, after the price of DOGE fell from its three-year high of $0.47 on December 9, demand began to wane.
By Sunday, DOGE's spot trading volume had fallen to $5.3 billion, the lowest level in 42 days since Nov. 3.
Dogecoin spot trading volume vs. DOGE price |Source: Coinglass
This $14.84 billion decrease shows that demand for Dogecoin has declined by 74% over the past week.
This sharp pullback raised concerns about a decline in interest, especially in contrast to the Bitcoin-led market rally that sparked widespread bullish sentiment.
$1.4 billion decrease in open interest confirms bearish sentiment
Besides spot market activity, recent Dogecoin derivatives trading data also paints a bearish picture. DOGE open interest, which measures the total amount of futures contracts outstanding, took a big hit following last week's market decline.
Dogecoin price and open interest comparison | Source: Coinglass
Since Dec. 9, traders collectively reduced their positions by nearly $1.4 billion as open interest fell from $4.5 billion to $3.03 billion.
Significant bearish concerns arise when spot trading volume declines along with open interest.
DOGE prices risk further correction as new buyers are reluctant to enter the market and short-term speculative traders exit positions.
Coupled with Bitcoin's resurgence, speculation has emerged that traders are avoiding meme coins like DOGE and moving their funds into BTC.
The expected US Federal Reserve interest rate cut later this week and President-elect Donald Trump's bullish comments on Bitcoin Strategic Reserve speculation have led to a negative price divergence between DOGE and BTC. It is likely to continue over the next few days.
Dogecoin price prediction: $0.35 support at risk
Dogecoin price trend is oscillating around the midline of the Keltner channel on the daily chart, showing signs of weakness.
A decline below the $0.40 intermediate support line indicates that the bears are starting to gain a foothold against short-term market momentum.
A decisive daily close below this level could confirm a larger downside move towards the important $0.35 support zone.
Dogecoin price prediction | DOGEUSDT (Binance)
If the psychological support at $0.35 breaks down, the lower bound of the KC band at $0.334 will serve as the next important support level to watch.
A break above this line could accelerate selling pressure and push DOGE deeper into bearish territory.
Meanwhile, on the upside, the first resistance lies at $0.477, with its upper band coinciding with recent highs.
Despite this bearish trend, the average directional index (ADX) value of 39.14 suggests strong underlying momentum.
A pullback above $0.405 could invalidate the bearish outlook and the bulls could regain control and set their sights back on $0.477.
Until then, strategic traders will remain cautious as the bears currently have the upper hand.
