Why Dogecoin Price Fell Below $0.22, And What Next?

Dogecoin (DOGE) saw a significant price drop over the weekend, falling below $0.22 after large holders sold more than 170 million tokens within 24 hours. This selloff caused the price to slide from $0.24 to around $0.215.

The whale activity coincided with a broader decline in meme coins, leading to nearly a 10% loss for Dogecoin. While this move has raised concerns about further downside pressure on the cryptocurrency, the coin was displaying 4.49% upside at the time of writing.

Dogecoin Price Dip as Whales Dump 170M DOGE

Recent data shows that large whale investors reduced their DOGE price holdings sharply. According to Santiment, addresses holding between 10 million and 100 million DOGE decreased their supply by around 170 million tokens in a single day.

This reduction lowered total holdings from 23.91 billion to 23.74 billion DOGE. The heavy selling contributed to Dogecoin reaching a one-week low on May 17.

At the same time, trading volume for Dogecoin fell by more than 34%, according to CoinMarketCap. The drop in volume indicates weakening demand amid the selloff. This combination of whale selling and low trading activity points to a cautious outlook on Dogecoin’s short-term price movements.

Derivatives Data Flips Bearish as DOGE Traders Post $7M Loss

The derivatives market for Dogecoin price also reflects bearish trends. Data from Rekt reveals that long positions worth $6.78 million were liquidated in the past 24 hours.

Short positions also suffered losses but to a smaller degree, with $1.14 million wiped out. Total liquidations over the day reached close to $7 million, mostly affecting leveraged long traders.

Open interest in Dogecoin futures declined by 6.9%, settling at $2.58 billion. This drop equals more than $290 million in closed contracts, which suggests diminished trader confidence in a quick recovery. The overall long-to-short ratio is approximately 0.94, indicating slightly more short positions than longs market-wide.

Despite these developments, experienced traders are still optimistic. Currently on Binance, long positions have a higher ratio than short positions, for a long-short ratio of 3.26.

Data from professional traders seems to signal that the price will recover soon. Still, the general bearish trend is offsetting the short-term bullish market trend

Dogecoin Technical Analysis as $0.21 Support Holds

Technically, Dogecoin’s price has been moving within a descending channel on the four-hour chart. It recently found support near $0.21 and bounced slightly but remains vulnerable. A breakdown below this support level could push prices down to $0.17, reversing recent gains made after Bitcoin’s rise above $100,000.

After a previous decline, there is now a renewed positive sign as prepared by the CMF, reading +0.11. Increased sales may keep the price from falling. Only if dogecoin moves above $0.24 can the bearish trend be stopped.

However, Dogecoin moved down to the lower band, a brief correction could happen soon, as seen by Bollinger Bands. Should the $0.21 mark hold strong, the price might rebound and try to reach the $0.23 resistance mark. Volume is now almost cut by half, so the price may not move much for the time being.

Liquidation Trends and Market Volatility

Dogecoin price futures liquidations in the last month indicate the market is very volatile. During mid-May, forced liquidations as a result of price drops were at least $14 million within 12 hours. When the price reaches $0.25 to $0.30 and then sharply falls, leveraged long traders are often affected.

On the other hand, short liquidations occur when the price rallies unexpectedly. Spikes in short liquidations happened in late April and early May, reaching $7 million to $14 million during brief price recoveries. This pattern shows how leveraged positions on both sides face forced exits during volatile swings.

Dogecoin’s price has gone from near $0.05 to around $0.30 in the last month. The higher the volatility, the greater the volume of liquidation.

A quick drop results in extended liquidations, while a strong rise instigates quick liquidations. As a result of this pull between traders, the price of the token keeps fluctuating. At the time of writing DOGE was trading at $0.2241.

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