Dogecoin (DOGE) Price Drops 7% as Network Activity Plunges to 4-Month Low

Dogecoin is feeling the heat. The popular meme coin has taken a sharp 7% hit, slipping to $0.2301, as network activity dries up. On-chain data paints a worrying picture, showing a significant slowdown in transactions and active addresses. With futures open interest also taking a hit, traders are left wondering—what’s next for DOGE?

Dogecoin’s Network Activity Slumps to October 2024 Levels

Crypto analyst Ali Martinez flagged a striking decline in Dogecoin’s network activity, marking its lowest point in nearly four months. The data reveals:

• Only 66 whale transactions were recorded, a concerning drop in high-value trades.
• Daily active addresses fell below 60,000, suggesting dwindling user engagement.

This slump is notable given Dogecoin’s typically high participation from retail and institutional players. Historically, declining network activity has often preceded further price weakness, making traders cautious.

Futures Open Interest and Liquidations Reflect Bearish Sentiment

Another red flag is the shift in Dogecoin’s futures market. According to CoinGlass data:

• Futures open interest dropped 3.9% to $2.15 billion.
• 24-hour liquidations surged to $9.23 million, with a staggering $8.62 million in long liquidations.

This shows that many traders betting on a price recovery have been wiped out. A spike in liquidations often leads to increased volatility, and with DOGE already in a downtrend, it could be a rocky road ahead.

Trading Volume Surges—But Is It a Bearish Sign?

One interesting twist in Dogecoin’s price action is the 60% jump in daily trading volume, pushing it beyond $1.23 billion. Typically, rising volume supports strong price movements, but in this case, it’s happening amid a sell-off. That suggests the increase is being driven by traders exiting positions rather than new buyers stepping in.

The Falling Wedge Pattern: A Hope for Reversal?

Despite the gloomy outlook, some analysts are pointing to Dogecoin’s technical setup. Experts note that DOGE has just completed its fourth falling wedge pattern, a formation that historically signals a potential rebound.

However, whether this pattern plays out as expected depends on broader market conditions and whether Dogecoin can attract fresh demand.

What’s Next for DOGE?

The next few days will be critical for Dogecoin. If selling pressure continues, the coin could test lower support levels. On the flip side, a sudden influx of buying interest or positive market sentiment could trigger a short-term bounce.

For now, the data suggests caution, with DOGE struggling to regain momentum. Traders will be watching closely to see if this meme coin has another surprise in store.