Dogecoin (DOGE) price has dropped by around 11.75% in the last 24 hours to reach $0.352 on Jan. 8. The memecoin’s slump is part of an overall crypto market decline, led by Bitcoin’s return below $100,000.
DOGE/USD versus BTC/USD four-hour price chart. Source: TradingView
Key factors driving Dogecoin and the broader crypto market lower include stronger-than-expected US economic data and a prevailing consolidation pattern on the DOGE price chart.
Strong US economic data triggers DOGE sell-off
Dogecoin’s losses today aligned with sell-off across the risk market, including US stocks that snapped their two-day winning streak.
The declines came as traders abandoned expectations for Federal Reserve rate cuts before the second half of the year.
Two sets of US economic data—ISM services and JOLTS job openings—highlighted the persistent risk of sticky inflation amid a robust economy.
Target rate probabilities for May 7 Fed meeting. Source: CME
Furthermore, US yields spiked after the ISM and JOLTS report, with the percentage returns on the benchmark 10-year Treasury note rising to their highest since May 2024.
A higher yield typically increases the opportunity cost of holding bonds, thus sapping investors’ appetite for riskier assets like stocks and crypto.
US 10-year Treasury note yield daily performance chart. Source: TradingView
The declines across the crypto market, including Dogecoin, accelerated further due to long liquidations, where traders holding leveraged bullish positions were forced to close them due to falling prices.
In the last 24 hours, the market saw liquidations totaling $710.47 million, with $631.13 million coming from long positions.
In Dogecoin’s case, the market witnessed $26.95 million worth of net liquidations, out of which $23.85 were longs.
Crypto market liquidation heatmap. Source: CoinGlass
The majority of traders had been betting on rising prices. As those expectations unraveled due to macroeconomic headwinds like strong US economic data and rising Treasury yields, the liquidation cascade added downward momentum to the DOGE and broader crypto market.
Another 25% DOGE price drop by February?
Dogecoin’s losses today align with its ongoing consolidation within a potential bull flag pattern.
A bull flag typically forms when an asset enters a downward-sloping channel following a sharp price increase. This pattern is considered bullish, as it often resolves with a breakout above the upper trendline, potentially pushing the price higher by the height of the preceding uptrend.
DOGE/USDT three-day price chart. Source: TradingView
DOGE’s current correction started after encountering resistance at the flag’s upper trendline.
The price may continue to decline toward the pattern’s lower trendline, with the downside target aligning closely with the 50-period exponential moving average on the 3-day chart (50-3D EMA, shown as the red wave) near $0.266—down approximately 25% from the current price levels—by February 2025.
Related: Dogecoin jumps 21% as whales accumulate, Galaxy predicts $1 DOGE
Conversely, a clear breakout above the flag’s upper trendline could send DOGE’s price toward $0.830 by March 2025, up over 140% from the current price levels.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
