Dogecoin’s price has recently faced a significant decline, falling 5.5% in just 24 hours to trade at $0.2494. This downturn marks the third consecutive day of losses for the popular memecoin, which struggled to maintain its recovery above $0.2874. The broader cryptocurrency market hasn’t fared much better, with the global market capitalization experiencing a 1.6% drop, currently valued at $3.14 trillion.
The primary catalyst for this sudden sell-off appears to be the collapse of the LIBRA token, a project closely linked to Argentine President Javier Milei, who is now facing fraud charges. The failure of LIBRA, which plummeted more than 95% from its peak of $1.03, has created a ripple effect, triggering panic and widespread selling across the memecoin sector.
Not only is Dogecoin feeling the brunt of this fallout, but other notable memecoins are experiencing severe losses as well. For instance, Shiba Inu (SHIB) saw a decline of 5%, trading at $0.0000151, while Ethereum-based Pepe (PEPE) dropped 2.5%. The most severe losses were recorded by Solana-based Bonk (BONK), which fell by a staggering 10% to trade at $0.00001551. Together, these losses have collectively wiped out nearly $5 billion from the memecoin market, exacerbated by a 19% increase in daily trading volume showcasing intensified selling pressure.
The ongoing bearish sentiment is further evidenced by a decrease in Dogecoin’s open interest (OI), now down to $2.3 billion from a peak of $5.42 billion. The funding rates have also flipped to positive, indicating cautious trading behavior from investors. Key support levels are currently being tested, with a critical watch on $0.26, which could signal a potential further drop towards $0.1455.
Market analysts suggest that Dogecoin’s relative strength index (RSI) indicates there remains substantial room for downward movement before entering oversold territory. If traders can manage a strong close above the bear flag’s boundary of $0.2660, a bullish reversal could be in the works, allowing for continued consolidation.
