Dogecoin has faced a significant decline in the past few hours, experiencing a sharp selloff near resistance levels. This drop was triggered by a statement from Elon Musk, the head of the Department of Government Efficiency (DOGE), clarifying that the U.S. government does not intend to adopt the widely-known memecoin, Dogecoin.
Dogecoin’s Netflow Trends Negative
In recent times, Dogecoin’s price has taken a hit, impacting various on-chain metrics. Coinglass data shows that Dogecoin saw over $9 million in total liquidations, with $6.5 million from buyers closing long positions and $2.55 million from sellers ending their positions. Additionally, Dogecoin’s open interest fell by 1.44%, dropping to around $1.6 billion.
This decline followed Elon Musk’s announcement that his government initiative, the Department of Government Efficiency (DOGE), is not affiliated with Dogecoin. The initiative was originally supposed to be called the “Government Efficiency Commission” but was renamed following public feedback, coincidentally sharing an acronym with Dogecoin.
Despite Musk’s well-known fondness for Dogecoin, the recent denial of any endorsement has created a mixed sentiment in the market, leading DOGE traders to lose hope and resulting in a sharp decline in its price.
On the positive side, Coinglass data indicates a significant outflow of $4.2 million from exchanges in the last 24 hours, suggesting that many holders are withdrawing their holdings. Investors seem to be seizing the opportunity to accumulate more Dogecoin, potentially stabilizing and boosting the price if buying pressure continues to build.
What’s Next for the DOGE Price?
Dogecoin has dropped below the EMA20 trend line, with sentiment remaining negative. However, buyers are defending a drop below the $0.16 level. As of writing, Dogecoin trades at $0.167, declining over 0.56% in the last 24 hours.
The declining 20-day EMA ($0.171) and the RSI below the midpoint indicate a bearish sentiment in the short term. The DOGE/USDT pair may aim for a retest of the $0.143 support level, potentially dropping towards $0.11.
Alternatively, if the price turns up from the current level and breaks above the 50-day SMA, it will signal that the bulls are attempting to form a higher low. A push towards EMA trend lines could increase the possibility of a break above the $0.2 resistance line. If buyers maintain momentum within the $0.25 resistance zone, Dogecoin could aim for a rise towards $0.29.