Dogecoin (Doge) broke through the crucial support zone of $0.10, falling below $0.09 and at one point touching nearly $0.08 before recovering to around $0.093, indicating that selling pressure is dominating the market.
The downward trend was reinforced by capital outflows from both spot and futures markets, coupled with traders reducing leverage. Momentum and position indicators relative to moving Medium also continued to lean toward a bearish trend.
- Doge lost the $0.10 mark, falling below $0.09 and briefly retreating to the $0.08 region.
- Spot stocks showed dominant selling pressure, futures indicated net outflows, and open interest decreased.
- For a clear reversal, buyers need to increase their buying pressure and reclaim the EMA20 around $0.11.
Dogecoin is under downward pressure after losing the $0.10 support zone.
Doge continued to slide further below $0.10, breaking through $0.09 and touching the August 2024 Dip around $0.08 before recovering to around $0.093.
During this downturn, Doge at one point traded around $0.09064, down 11.4% on the day. During the same period, the memecoin's market Capital decreased by more than $1 billion, reflecting significant outflows of funds.
A break below $0.10 caused this price level to shift from support to psychological resistance. When the price fails to hold key round numbers, selling pressure typically increases due to stop-loss orders and risk aversion among short-term investors.
The spot shows that sellers are dominant with a negative buy-sell delta.
Spot data shows that selling volume exceeds buying volume, creating a negative delta and reinforcing the signal that sellers are in control.
According to Coinalyze data for the period of February 5-6, Doge recorded 3.1 billion units of sales volume and 2.6 billion units of purchases volume. The buy-sell spread (delta) was negative approximately 400 million units, indicating that supply exceeded demand in the short term.
A prolonged negative Delta typically indicates increasing downward pressure, especially when buyers are not strong enough to absorb the selling pressure. In this context, rallies are easily followed by sell-offs, prolonging the downtrend.
The futures market is experiencing net outflows and weakening leverage.
In futures trading, traders tend to close positions, leading to net outflows and a decrease in open interest, reflecting a risk-averse sentiment.
CoinGlass data shows Doge recorded $2.22 billion in outflows compared to $2.18 billion inflows, resulting in a Futures Netflow of approximately $39 million. This is an improvement from the previous $88 million, but still indicates that net outflows are present.
Open Interest decreased by 16.7% to $986.39 million, indicating a decline in open positions and leverage usage across the market. A sharp drop in Open Interest during a downtrend typically suggests that closing positions (exiting trades) predominated rather than opening new positions to buy at the Dip.
Downward momentum prevails as the Stochastic RSI falls deep into bearish territory.
The Stochastic RSI has fallen to 13.70, indicating that momentum is weak and selling pressure may remain in control of short-term developments.
Very low Stochastic RSI levels often reflect strong downward pressure and the possibility that the market is being dominated by sellers. While a low level sometimes signals "oversold" conditions, this does not necessarily mean that prices will reverse immediately if the money flow and trend structure remain negative.
During a strong downtrend, momentum indicators can get stuck in bearish territory for an extended period. In such cases, more reliable signals usually come from a clear shift in buying pressure and the price reclaiming key technical levels.
Doge needs to reclaim the EMA20 around $0.11 to pave the way for a move toward $0.12.
For a meaningful reversal, Doge needs to increase buying pressure and reclaim the EMA20 around $0.11; otherwise, the risk of a return to $0.08 remains.
Currently, Doge is trading below both short-term and long-term moving Medium (EMAs), reinforcing the view that the downtrend remains dominant. When the price is below the EMA, rallies often encounter resistance from the moving Medium as sellers take advantage to offload their holdings.
If selling pressure persists, a retest of the $0.08 level is possible. Conversely, to confirm a reversal, buyers need to generate sufficient demand to push the price above and hold the EMA20 at around $0.11, thus providing a basis for a move towards $0.12.
Frequently Asked Questions
Why did Doge plummet below $0.10?
Doge fell due to increased spot selling pressure, with futures traders closing positions and reducing leverage, leading to capital outflows and reinforcing the downtrend after losing the $0.10 support zone.
What does the negative Delta buy/sell order value on the spot market indicate?
A negative Delta indicates that selling volume exceeds buying volume, reflecting that sellers are dominant. If this situation persists, prices usually face further pressure and are more likely to experience further declines.
What do negative Futures Netflow and decreasing Open Interest mean for Doge?
Negative net flow indicates net outflow of funds from futures, while decreasing open interest reflects weakening open positions and leverage. Combined, this is generally a bearish signal as traders are reducing risk rather than opening new positions.
What is the key level for Doge to reverse its upward trend?
Technically, Doge needs increased buying pressure to reclaim the EMA20 around $0.11. If it holds above this level, the possibility of an extended recovery to $0.12 will become clearer.
