Highlights:
- Dogecoin has experienced a significant correction in the last 24 hours
- Correction triggered by uncertainties around multiple Trump-linked meme coins
- A strong bullish rebound could see DOGE retest $0.40 soon
In the last 24 hours, the cryptocurrency market underwent its largest liquidation event year-to-date, incurring significant losses for Dogecoin traders. Based on the information provided by Coinglass, within a day of DOGE reaching $0.43, the price crashed. Rising volatility has caused the price of Dogecoin to lose around $65 million. At the time of going to press, Dogecoin was down by 9.35% to trade at $0.346. Trading volumes have also dropped by 30.51% in the last 24 hours to $6.98 billion.
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Long Positions Suffer as Dogecoin Price Faces Sharp Correction
The long trades mostly contributed to the overall losses and were responsible for $54.81 million of liquidation. Meanwhile, short positions also caused some damage, losing $7.90 million. During the peak of Sunday’s dip, when Dogecoin was hovering over $0.40, reaching $0.43, short traders likely suffered these losses. Subsequently, in the second half of Sunday, the DOGE value reached a low of $0.35, prompting mass long liquidations.
Broader Cryptocurrency Market Pushing Dogecoin Lower
Dogecoin’s price action in the last 24 hours is reflected across the cryptocurrency market. During the same timeframe, the total liquidation in the cryptocurrency market reached over $1 billion. Liquidation in long position trading reached as high as $903.59, while the liquidation value for short positions closed was around $260 million.
The price drop from $106,000 to $100,000 in Bitcoin greatly aggravated the crash. Dogecoin, which has a high correlation with Bitcoin, was mostly affected by Bitcoin price action. Analysts are optimistic that this is short-term, though. One market analyst expects Bitcoin to recover to $115,000 or $120,000, reasoning that such changes enhance the adoption of cryptocurrency at institutional levels.
DOGE Whale Activity Points to Underlying Bullish Sentiment
Despite the marker correction, Dogecoin whale activity points to a potential breakout. Data points to a surge in DOGE whale buys, triggering speculation that Dogecoin can make a strong rebound back to prices above $0.40. Smaller investors are also amplifying Dogecoin’s trading activity thanks to the political expectations around it.
If this doesn’t send Dogecoin to $1 and beyond, nothing will…
It is time for the simulation to do its thing. pic.twitter.com/HUPzWimBLu
— The Coach 𝕏Đ (@thedogecoach) January 21, 2025
Political Advocacy Aids Optimism for DOGE
The electoral triumph of Donald Trump as the 47th President was expected to trigger a crypto rally but has led to significant volatility. However, analysts believe this is short-term, and the market will turn bullish once things settle.
Elon Musk, a vocal supporter of Dogecoin, further complements this narrative. While supporting the cryptocurrency agenda espoused by Trump, Musk has promoted the DOGE department, which aims to cut wasteful government spending. This optimism, bolstered by Musk’s popularity combined with the sentiment surrounding the Dogecoin token, has caused a surge of confidence among investors.
Obstacles Remain for Dogecoin Price
Despite the optimism surrounding the DOGE department, there have been some dissenting opinions, including a case of legal action citing federal law violations. Regardless of this hiccup right within the DOGE department, the price movement of Dogecoin remains one that analysts are watching keenly.
Technical Analysis – DOGE Bulls Struggling at Intra-Day Resistance
From the charts, Dogecoin could soon be headed for a significant price rebound. After a sustained correction that started on Saturday, January 18, Dogecoin bulls appear to be regaining control. At the time of going to press, Dogecoin was pushing towards the $0.346 intra-day resistance and with significant momentum.
If bulls can breach the $0.346 resistance, then Dogecoin could easily rally to around $0.38 in the day. This potential rebound is supported by the fact that Bitcoin’s price also appears to be rebounding in the day. If Bitcoin recovers from the market confusion triggered by the Trump meme coins, then Dogecoin and other more established altcoins could see a surge in value.
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