Dogecoin price continues to decline for two consecutive days, coinciding with worsening sentiment in the crypto industry.
Current Dogecoin Price Dynamics
Dogecoin, the largest meme coin in the market, fell by 6% on January 8, reaching $0.3415, its lowest level in almost a week. The trading volume rose to $5.26 billion, up from $3.3 billion on the previous day. The surge in trading volume suggests that some investors have begun liquidating their positions.
Market Liquidations
Dogecoin's drop triggered a significant increase in liquidations. Bullish positions worth $20 million were liquidated on Tuesday, followed by nearly $15 million on Wednesday, marking the largest since December 19. When large liquidations occur, it often results in a sharp price drop as leveraged bullish trades are automatically closed by exchanges.
Expert Expectations
Despite current difficulties, some analysts expect Dogecoin's price to bounce back. Bitcoin, which often significantly influences the broader crypto market, remains in a strong bullish trend. The Percentage Price Oscillator indicator for Dogecoin is also bullish, suggesting the coin may remain in the current range before potentially rebounding to $0.4830 in the current quarter. However, a bearish scenario could see the price drop to $0.2630.
The current situation with Dogecoin reflects the volatility in the cryptocurrency market. While recent events indicate increased risk, the potential for recovery remains, especially with positive signals from Bitcoin.
