Why Is Dogecoin (DOGE) Price Down Today?

NOIDA (CoinChapter.com)— Despite Dogecoin (DOGE) ranking second in total non-empty wallets among large-cap altcoins and a minor recovery on July 26, market data suggests a bearish outlook. Furthermore, a technical setup adds to the bearish mood, which could be why the Dogecoin price is down today.

According to Santiment, DOGE has 6.69 million holders, trailing only Litecoin’s 8.08 million. The high number of holders suggests strong adoption. However, despite this apparent adoption, the current market indicators suggest a bearish outlook for the DOGE USD pair.

Bearish Outlook For DOGE

Recent data from Coinglass and Messari reveals bearish trends for Dogecoin (DOGE).

Coinglass charts show significant fluctuations, with the metric beginning to decline around July 24. Declining open interest often indicates traders are closing positions, signaling decreasing market activity and interest. It suggests the current trend is losing momentum.

In a bearish market, falling open interest combined with a drop in prices might signal a lack of confidence and potential for further downside.

Messari charts highlight the number of addresses holding significant DOGE amounts. Addresses with over 1 million DOGE rose steadily to 4,819 by July 2024, and those with over 100,000 DOGE reached 40,283.

While this suggests accumulation by large holders, the fluctuating number of addresses with 10,000 DOGE, despite an overall increase to 238,076, points to potential short-term selling. The stability in addresses holding over 1,000 DOGE, which gradually increased to 832,550, indicates a steady but cautious interest from smaller investors.

Hence, despite some accumulation by large holders, the persistent negative weighted open interest and fluctuations among smaller investors suggest a bearish outlook for DOGE.

Technical Setup Could Be Why Dogecoin Price Is Down

Meanwhile, DOGE prices recently faced rejection from the upper trendline of the ‘descending channel‘ pattern.

A descending channel pattern is characterized by a series of lower highs and lower lows confined between two parallel trendlines. The upper trendline acts as resistance, while the lower trendline serves as support.

DOGE is currently trading within a descending channel. The channel’s recent rejection of the DOGE USD uptrend implies that DOGE is likely to continue its decline towards the lower trendline, which acts as the support level.

Given the current price action and the overall bearish sentiment, it is probable that DOGE will test the support of the descending channel before any potential recovery. If that happens, Dogecoin prices would drop nearly 35%.

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