Dogecoin DOGEUSD dropped 11.60% a day after establishing its yearly high of $0.484, reaching $0.428 on Dec. 9.
Bitcoin below $100K limits Dogecoin price upside
DOGE’s decline aligned with broader weakness across the cryptocurrency market, with Bitcoin BTCUSD slipping back below the $100,000 threshold and Ether ETHUSD struggling to maintain its momentum above $4,000.
That has sparked crypto market liquidations worth over $445.25 million in the last 24 hours, with longs and shorts comprising $360.16 million and $85.08 million, respectively.
Smaller altcoins—marked as ‘others‘ in the image below—accounted for most liquidations.
Meanwhile, the Dogecoin futures market witnessed $25.42 million worth of liquidations, with longs amounting to around $21.98 million. The large liquidations show that many traders were overly optimistic about DOGE’s price, expecting it to continue rising.
When the broader market, including Bitcoin, retreated, these traders were caught off-guard, leading to forced sell-offs that contributed to Dogecoin’s price decline.
DOGE’s drop follows bearish divergence signals
Dogecoin’s ongoing price decline follows several days of bearish divergence, marked by its rising price contrasting with a falling relative strength index (RSI) on the daily chart.
The divergence is evident as DOGE’s price formed consecutive higher highs during its uptrend since Nov. 11, while its RSI simultaneously charted lower highs.
In other words, DOGE’s bullish momentum is losing strength, increasing the likelihood of a reversal or consolidation phase.
Bearish divergence often precedes corrective moves, and DOGE’s price action reflects this. The RSI has also dropped below 70—exiting overbought territory—further signaling that buyers may lose control in the short term.
Such technical setups often encourage traders to secure profits, contributing to sell-offs.
DOGE sell-off part of consolidation trend
Additionally, Dogecoin’s sell-off occurred after testing the upper boundary of its prevailing ascending channel pattern.
The memecoin briefly spiked above the channel’s resistance on several occasions, forming bullish wicks—long upper shadows on the candles—which signal an initial surge in buying interest. However, deeper corrections ensued.
As of Dec. 9, the bears will be eyeing a further decline toward the channel’s lower trendline, which coincides with the 20-day exponential moving average (20-day EMA; the purple wave) at around $0.410.
A further sell-off risks crashing DOGE toward the 0.236 Fibonacci retracement level at $0.391 by December, down 9.75% from the current price levels.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
