Why is Dogecoin price down today?
Dogecoin (DOGE) price fell 11.75% in the last 24 hours to reach $0.352 on January 8. The decline of memecoin is part of the overall crypto market collapse, leading Bitcoin to return to less than $100,000.
Four hour price chart of DOGE/USD vs. BTC/USD. Source: TradingView
Key factors driving Dogecoin and the broader crypto market include lower-than-expected US economic data and a consolidation pattern on the DOGE price chart.
Strong US economic data spurs DOGE sell-off.
Dogecoin's losses coincided with the sell-off in the risk market, including US stocks, which held their two-day winning streak.
The decline came as traders abandoned expectations for Federal Reserve rate cuts ahead of the second half of the year.
Two U.S. economic data—ISM services and JOLTS job openings—highlight persistent inflation concerns in a strong economy.
Target rate odds for the May 7 Fed meeting. Source: CME
US yields also rose after the ISM and JOLTS report, with benchmark 10-year Treasury note percentage yields rising to their highest since May 2024.
Higher yields often increase bond holdings, thus weakening investors' appetite for riskier assets such as stocks and crypto.
The US 10-year Treasury note provides a daily performance chart. Source: TradingView
The declines in the crypto market, including Dogecoin, were further compounded by long-term liquidity, with traders who held positions forced to close due to falling prices.
Over the past 24 hours, the market has seen a total of $710.47 million in liquidations, with $631.13 million coming from long positions.
In the case of Dogecoin, the market saw $26.95 million worth of net liquidity, of which $23.85 was long.
Crypto Market Liquidity Heat Map. Source: CoinGlass
Most of the traders were playing on the price increase. As those prospects unfolded due to macroeconomic headwinds such as strong US economic data and rising Treasury yields, liquidity flows accelerated the downward spiral into DOGE and the broader crypto market.
Another 25% DOGE price drop in February?
Dogecoin's losses today are consistent with the ongoing consolidation in a bullish flag pattern.
A bull flag is typically formed when an asset enters a downward sloping channel following a significant price increase. This pattern is considered bullish, as it usually resolves with a break above the upper trendline, which can lead to a higher price at the previous high.
DOGE/USDT Three Day Price Chart. Source: TradingView
DOGE's current correction was initiated after it encountered resistance at the top line of the flag.
The price may continue to decline towards the lower pattern line, the lower target is the 50-time exponential moving average on the 3-day chart (50-3D EMA, shown as a red wave) at $0.266 – down about 25% from current price levels – in February 2025.
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Conversely, a clear divergence above the flag's upper line could send the price of DOGE to $0.830 by March 2025, which is more than 140% above current price levels.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
