Dogecoin, no reaction even after whales buy over 500 million... will it fall below $0.1?

▲ Dogecoin (DOGE)

Dogecoin (DOGE) is failing to rebound due to a combination of bear market fears, a decrease in open interest, and a bearish chart pattern. An analysis suggests that short-term downward pressure could intensify as retail investor interest fails to revive despite large-scale purchases by whale investors.

According to Coingape on May 25 (local time), Dogecoin has fallen 3.29% in the last 7 days and 12% from $0.117 on May 14. Coingape analyzed that the lack of upward momentum in Bitcoin (BTC) and the overall cryptocurrency market, decreasing open interest, and bearish chart patterns are the reasons why Dogecoin's price is not rising.

Deteriorating market sentiment was cited as the primary factor preventing Dogecoin's rise. Bitcoin recently dropped from $82,000 to $77,000 in the past two weeks, and Ethereum (ETH) is facing a potential decline below $2,100. Coingape explained that without a catalyst to attract retail investor interest, it would be difficult for Dogecoin to rise independently when Bitcoin falls.

Dogecoin's trading volume has also contracted. According to CoinMarketCap, Dogecoin's trading volume decreased by 28% in 24 hours, recording $556 million. Although whale investors purchased 525 million DOGE, it was not enough to stimulate buying by retail investors.

The Crypto Fear & Greed Index also reflects the burden on investor sentiment. The index recorded 30, indicating that the market remains in the fear zone. Coingape analyzed that if buyers continue to hesitate, Dogecoin could fall below $0.10. It also pointed out that for Dogecoin to rise, Bitcoin needs to climb above $80,000.

Speculative demand has also receded in the derivatives market. Dogecoin's open interest decreased from $1.76 billion on May 15 to $1.31 billion on May 25. This means $450 million disappeared in just ten days. The long/short ratio is 0.91, indicating that market participants are weighing the possibility of Dogecoin falling below $0.10 more heavily than recovering to $0.15.

Coingape analyzed that as long as the decrease in open interest continues, a Dogecoin rebound will not be easy. It explained that an increase in traders taking long positions is necessary for open interest to increase, and that trend could support a long-term bullish outlook.

Technically, warning signs have also intensified. A rounding top pattern appeared on Dogecoin's daily chart, which forms when an upward trend loses momentum. The depth of the rounding top was measured at 16%. Analysis suggests that if Dogecoin falls below the $0.098 support level, it could drop an additional 16% to $0.082.

However, if Dogecoin maintains the $0.098 support level, it can avoid the $0.082 decline scenario. In this case, Coingape believes Dogecoin could rebound towards the top of the rounding top, $0.118. Dogecoin is at a turning point that will determine its short-term direction amidst fear sentiment, decreasing open interest, and the $0.098 support level.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*