Analyzing Dogecoin’s hit to 2023 lows – Can DOGE reclaim $0.07?

Amid a broader crypto pullback, Dogecoin’s downward momentum strengthened significantly. The memecoin breached the $0.07 support and dropped to $0.068.

Dogecoin last touched these levels in November 2023. At press time, Dogecoin [$DOGE] traded around $0.069 after falling 4.3% on the daily chart.

Over the same period, the memecoin’s Trading Volume climbed 57% to $866 million, reflecting increased market activity.

The decline also triggered increased liquidations across Dogecoin’s leveraged positions.

According to CoinGlass, $8.20 million worth of long positions were liquidated over 24 hours. Short liquidations reached only $552,490, showing that the decline disproportionately affected bullish traders.

Why are Dogecoin traders exiting?

As Dogecoin plummeted, rising liquidation risk prompted leveraged traders to reduce their exposure.

According to Coinalyze, Dogecoin’s Sell Perps Volume climbed to 493.04 million. Meanwhile, Buy Perps Volume stood at 426.535 million.

As a result, the Buy-Sell Delta fell to -66.505 million. Net Buying also remained negative at -1.385 billion.

Both readings showed that selling activity outweighed buying across Dogecoin’s perpetual market. The Futures market recorded similar capital outflows.

Futures Outflows climbed to $520.41 million, while Futures Inflows stood at $425.94 million. Consequently, Futures Netflow declined 361.34% to -$94.46 million.

This indicated that considerably more capital exited Dogecoin futures than entered during the measured period. These conditions intensified $DOGE’s downward pressure and left traders watching whether $0.07 could be recovered.

Can $DOGE avoid further losses?

Amid heavy position reductions, Dogecoin’s downward pressure intensified.

The Relative Strength Index [RSI] reflected this weakness. The RSI fell to 31.34, placing $DOGE close to oversold territory.

This reflected intense bearish momentum, although the near-oversold reading could eventually attract dip buyers.

Therefore, if the current pressure persists, $DOGE could remain below $0.07 and fall towards $0.065. However, Spot Netflow offered some relief from the derivatives’ weakness.

Spot Netflow remained negative as Dogecoin declined on the 23rd and 24th of July. It stood at -$1.87 million at press time, showing that exchange outflows exceeded inflows.

Those withdrawals suggested reduced immediate selling availability and offered $DOGE some support.

If demand holds, Dogecoin could reclaim $0.07 and target $0.075. Continued derivatives weakness may expose $0.065.

Final Summary

• Dogecoin [$DOGE] dropped below the $0.07 support level and declined to 2023 lows of $0.068.
• Amid rising liquidation risk, traders panicked and exited their positions, further strengthening the downward momentum.