Dogecoin (DOGE) price fell approximately 11.75% in the last 24 hours, reaching $0.352 on January 8. Memecoin’s plunge is part of an overall cryptocurrency market decline driven by Bitcoin’s sub-$100,000 yield.
DOGE/USD vs BTC/USD 4-hour price chart. Source: TradingView
Key factors driving Dogecoin and the broader cryptocurrency market lower include stronger-than-expected US economic data and a general consolidation pattern on the DOGE price chart.
Strong US Economic Data Drives DOGE Sell-Off
Dogecoin’s losses today coincided with a selloff across risk markets, including US stocks, which snapped a two-day winning streak.
The decline came as traders gave up expectations of a Federal Reserve interest rate cut before the second half of the year.
Two sets of U.S. economic data, ISM Services and JOLTS Jobs, have highlighted the risk of persistent inflation amid a strong economy.
Target interest rate probability for the May 7 Fed meeting. source: CME
US yields also surged after the ISM and JOLTS reports, pushing the yield on the benchmark 10-year Treasury note to its highest since May 2024.
Higher yields generally increase the opportunity cost of holding bonds, weakening investors’ preference for riskier assets such as stocks and cryptocurrencies.
US 10-year Treasury yield daily performance chart. Source: TradingView
The decline across cryptocurrency markets, including Dogecoin, was further accelerated by long-term liquidations, which forced traders holding leveraged bullish positions to close them due to falling prices.
In the last 24 hours, a total of $710.47 million was liquidated in the market, of which $631.13 million was liquidated from long positions.
For Dogecoin, there was a net liquidation in the market worth $26.95 million, of which $23.85 was a long position.
Cryptocurrency market liquidation heatmap. Source: Coinglass
Most traders were betting on a rise in price. With these expectations dashed by macroeconomic headwinds such as strong US economic data and rising Treasury yields, the liquidation cascade added downward momentum to DOGE and the broader cryptocurrency market.
Will DOGE prices drop another 25% by February?
Dogecoin’s current losses are consistent with an ongoing consolidation within a potential bull flag pattern.
Bull flags typically form when an asset enters a downward channel after a sharp price rise. This pattern is considered bullish because it often resolves by breaking the upper trend line, potentially sending the price higher by the height of the previous uptrend.
DOGE/USDT 3-day price chart. Source: TradingView
DOGE’s current correction began after it met resistance at the upper trendline of the flag.
Prices may continue to decline towards the pattern’s lower trendline, with downside targets closely aligned with the 50-day exponential moving average on the 3-day chart (50-3D EMA, shown as a red wave) and near $0.266 (down about 25 days) . % of current price level – until February 2025.
relevant: Dogecoin rises 21% as whales pile up, Galaxy predicts $1 DOGE.
Conversely, a clear break above the flag’s upper trendline could push DOGE’s price to $0.830 by March 2025, an increase of over 140% from the current price level.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.