The price of Dogecoin (DOGE) plummeted by 10% within hours, mirroring the overall decline in the market. Near-term technical analyses suggest that DOGE’s price could decline by an additional 25% by February. The day’s drop was primarily linked to U.S. economic data…
Impact of U.S. Economic Data on Dogecoin Price
The ISM Services data and the JOLTS job openings report from the U.S. indicated that the economy remains on solid ground. The report also highlighted the persistence of inflation risks, which boosted expectations that the Federal Reserve would not lower interest rates before the second half of 2025.
As a result, the increase in U.S. 10-year Treasury yields pushed investors toward less risky assets while intensifying selling pressure in the crypto market. Rising bond yields increase the opportunity cost of holding risky assets, leading to declines in both stock markets and cryptocurrencies.
This broader market decline was accompanied by liquidations of long positions. Over the past 24 hours, a total of $710.47 million was liquidated, with $631.13 million originating from long positions. For Dogecoin specifically, net liquidations amounted to $26.95 million, with $23.85 million coming from long positions opened in anticipation of price increases. This indicates that a significant portion of the market had positioned itself for price gains, only for macroeconomic factors to upend those expectations.
DOGE Faces 15% Short-Term Drop Risk
DOGE’s ongoing decline fits within a potential bull flag pattern. This pattern often emerges during uptrends and signals a likelihood of upward breakout. However, DOGE started retracing after encountering resistance at the pattern’s upper trendline.
Current technical indicators suggest the price could break downward from the flag and fall to $0.266, a level near the 50-period exponential moving average (EMA) on the 3-day chart. This implies a 25% drop from the current price level.
In an alternative scenario, if DOGE manages to break above the bull flag’s upper trendline, it could soar to $0.830 by March 2025—representing a gain of over 140% from current levels. However, this scenario hinges on significant shifts in market dynamics and potentially positive macroeconomic developments.
Dogecoin Under Macro Pressure
Currently, Dogecoin’s movements are influenced by macroeconomic pressures and technical indicators. Changes in risk appetite within the market and U.S. economic data are proving pivotal for price actions. While short-term fluctuations seem likely, this period is crucial for observing long-term scenarios.
As previously reported by Kriptokoin.com, statements from influential figures like Elon Musk continue to impact Dogecoin’s price.
