The trading Volume of Dogecoin (DOGE) has plummeted to the lowest level since November, indicating a significant decrease in market participation on both spot and derivative exchanges.
This decline is in line with DOGE's failure to break above $0.48 since December 8th. If this trend persists, the meme coin's 300% year-to-date gain may face additional downward pressure.
Interest in DOGE trading plummets
In October, the price of Dogecoin was $0.10. In the first week of December, it surged to $0.48. Several analysts had suggested that the cryptocurrency's value could be higher. The price spike may have been related to Donald Trump's election as US President and the return of retail investors.
A few weeks after Trump's election, Dogecoin's trading volume increased to $5.69 billion, reflecting notable interest in cryptocurrency trading. However, according to sentiment data, the volume has now decreased to $415.31 million.
This figure represents the lowest level since November 4th. An increase in trading volume is generally a bullish signal. Therefore, if the recent decline persists, DOGE may face another price drop in the short term.
Another indicator suggesting a further DOGE decline is the weighted sentiment. Weighted sentiment measures the market's perception of a cryptocurrency using comments on social media platforms.
Positive values in this metric generally reflect a bullish market sentiment, while negative values indicate widespread pessimism, which is typically a bearish signal. Currently, this indicator is at -0.57, indicating an increase in negative comments.
If this sentiment persists, Dogecoin may struggle to attract increased demand, and its price could face downward pressure, potentially falling below $0.48.
DOGE price prediction: Could it drop below $0.36?
On the 4-hour chart, DOGE continues to trade below a descending triangle pattern. A descending triangle is a bearish chart pattern characterized by a downward-sloping upper trendline and a flat lower trendline.
This pattern generally indicates a continuation of a downward price movement, as sellers consistently push the price lower, and buyers struggle to maintain support at the horizontal trendline.
The fact that DOGE's price is below the lower support line suggests that the meme coin may not be able to push higher in the short term. Instead, the cryptocurrency's value could drop below $0.36.
However, if sentiment for the coin turns bullish and trading volume increases, this may not be the case. In such a scenario, DOGE could rise to $0.45.
