Dogecoin dips below $0.20 amid a broader meme coin market correction, testing the critical $0.17 support zone. Are the bears about to take control?
With the crypto market pulling back, the meme coin sector has seen a 5% decline in market capitalization over the past 24 hours, falling to $60.47 billion.
As the broader market corrects, Dogecoin is down nearly 10% in the same timeframe, breaking below the psychological $0.20 level. Will this pullback in the largest meme coin lead to a breakdown of the $0.17 demand zone?
Dogecoin Price Analysis
On the daily chart, Dogecoin’s price action reveals a bullish failure to maintain the uptrend seen earlier this week. After facing strong rejection at the 100-day EMA of $0.2043, the meme coin has taken a bearish turn, with a third consecutive red candle forming.
Dogecoin is now trading below the 23.60% Fibonacci retracement level at $0.17718. Its current market price is $0.1740, reflecting a 3.95% drop on the day.
As the pullback intensifies, pressure is building on the local support trendline and the $0.17 demand zone. While optimistic traders are looking for a potential double-bottom reversal at $0.17, the broader market sentiment increases the risk of a breakdown.
The MACD and signal lines have failed to form a bullish crossover and continue to trend downward, with a rising number of bearish histogram bars. Additionally, the continued decline in the 50-, 100-, and 200-day EMAs reinforces the bearish outlook.
According to Fibonacci levels, a deeper pullback to $0.1298 is possible. However, price action analysis suggests minor support at $0.1529. On the flip side, a potential reversal could target the 50-day EMA at $0.1976.
Bearish Imbalance in Dogecoin Derivatives
As the broader market sell-off gains momentum, optimism in Dogecoin derivatives is fading. According to Coinglass data, open interest has dropped by 14.17%, falling to $1.80 billion.
Bullish sentiment among derivatives traders is also weakening, as reflected in the OI-weighted funding rate, which has declined to 0.0009%.
Notably, the past 24 hours have seen a significant wipeout of bullish positions, with $24 million in long liquidations, compared to just $1.6 million in short liquidations.
This has created a bearish imbalance in Dogecoin’s open interest, with the long/short ratio dropping to 0.9084.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
