Dogecoin’s (DOGE) price has tapered downward since August 17, losing roughly 9% of its value over the past three days.
As the token slides, futures traders who had opened positions betting on a rally have plunged into losses. With new demand remaining muted, long traders of the meme coin may be at risk of further declines.
DOGE’s Decline Triggers Long Liquidations
DOGE’s recent price decline, worsened by the broader market dip, has triggered a wave of long liquidations in its futures market. Per Coinglass, this has totaled $10 million in the past 24 hours as the meme coin extends its decline.
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Moreso, yesterday, DOGE Futures Long Liquidations Dominance climbed to 98%, signaling that most liquidated positions were long bets.
Liquidations occur when an asset’s value moves against a trader’s position. In such cases, the trader’s position is forcefully closed due to insufficient funds to maintain it.
Long liquidations occur when an asset’s price falls past a threshold, making traders who bet on a price increase exit the market.
Excessive losses from these liquidations could dampen market sentiment among DOGE holders and futures traders alike, triggering further sell-offs. This may deepen the meme coin’s decline and extend its downward momentum in the near term.
DOGE Buyers Lose Steam
As of this writing, DOGE’s Relative Strength Index (RSI) struggles below the 50-neutral line, supporting this bearish outlook. It is at 46.36, reflecting the waning buy-side activity among market participants.
The RSI indicator measures an asset’s overbought and oversold market conditions. Typically, an RSI above 70 indicates an asset may be overbought (potentially overvalued) and due for a rebound. Conversely, values under 30 suggest it may be oversold (potentially undervalued) and is eyeing a bullish reversal.
At 46.36, DOGE’s RSI signals weakening bullish momentum. It suggests that buyers are struggling to maintain control amid the recent sell-off, and if this continues, the meme coin could fall toward $0.1758.
On the other hand, a rebound in buying pressure could push its price past $0.2347.
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