Dogecoin has seen a significant drop in value in recent hours, encountering a sharp sell-off near resistance levels. This decline was triggered by a statement from Elon Musk, the head of the Department of Government Efficiency (DOGE), stating that the U.S. government has no plans to adopt the popular meme cryptocurrency, Dogecoin.
Dogecoin’s Netflow Trends Negative
Recently, Dogecoin’s price has been negatively impacted, affecting various on-chain metrics. Coinglass data shows that Dogecoin experienced over $9 million in total liquidations, with $6.5 million coming from buyers closing long positions and $2.55 million from sellers ending their positions.
Additionally, Dogecoin’s open interest, which measures total outstanding trading positions, dropped by 1.44% to around $1.6 billion. This decrease followed Elon Musk’s clarification that his government initiative, the Department of Government Efficiency (DOGE), has no affiliation with the meme coin. This clarification came after a website mix-up that briefly boosted Dogecoin’s price by 14% in February.
Furthermore, Elon Musk revealed that the initiative was originally supposed to be named the “Government Efficiency Commission” but was renamed due to public feedback. The acronym coincidentally matches Dogecoin, showcasing Musk’s affection for the cryptocurrency.
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However, Musk’s recent disavowal of any endorsement has caused mixed feelings in the market, leading DOGE traders to lose hope and resulting in a sharp price decline.
Coinglass data reveals that Dogecoin has witnessed a significant outflow of $4.2 million from exchanges in the past 24 hours, indicating that many holders are withdrawing their assets. Despite the price drop, this movement suggests that investors are taking the opportunity to acquire more Dogecoin, potentially stabilizing and boosting the price if buying pressure continues at these levels.
What’s Next for the DOGE Price?
Dogecoin has fallen below the EMA20 trend line, signaling a negative sentiment. However, buyers are staunchly defending the $0.16 level. Currently, Dogecoin is trading at $0.167, down more than 0.56% in the last 24 hours.
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The declining 20-day EMA ($0.171) and the RSI below the midpoint suggest a bearish sentiment in the short term. The DOGE/USDT pair may target a retest of the $0.143 support level, with a drop potentially pushing the price towards $0.11.
Conversely, a price reversal from current levels and a break above the 50-day SMA would indicate bullish attempts to form a higher low. If buyers drive the price towards the EMA trend lines, the chances of breaking above the $0.2 resistance line will increase.
If buyers maintain momentum within the $0.25 resistance zone, Dogecoin could aim for a rise towards $0.29.
