Dogecoin continued its decline, briefly falling below the previous support level of $0.09, hitting a low of $0.081, returning to a near four-month low. At the time of writing, DOGE was trading at $0.085, down approximately 5.3% on the day and down about 12% over the past week.
This decline coincided with a weakening of the overall crypto market. After the price broke down, leveraged long positions were liquidated, further amplifying short-term selling pressure.
Long positions being liquidated amplified the decline.
Data shows that approximately $6.4 million in Dogecoin positions were liquidated in this round, of which about $5.3 million were long positions. After leveraged long positions are forcibly liquidated, exchanges will forcibly close some positions, and the market will then face more selling pressure.
The futures market also showed clear signs of withdrawal. CoinGlass data shows that DOGE futures saw an outflow of approximately $755 million, compared to an inflow of approximately $696 million during the same period, resulting in a net outflow of approximately $58.9 million, reflecting that some traders chose to exit the market as volatility intensified.
Open interest fell to a March low
Meanwhile, DOGE open interest fell to approximately $1.02 billion, its lowest level since March. A decline in open interest typically indicates a contraction in leveraged funds and a decrease in market risk appetite.
The report also mentioned that the simultaneous occurrence of concentrated exits and liquidations in the futures market indicates that short-term traders are more inclined to reduce their exposure rather than continue to increase their positions to bet on a rebound.
Spot buying begins to flow back.
Unlike the concentrated withdrawal in the futures market, there was some bargain hunting in the spot market. DOGE's net spot flow has remained negative for four consecutive days, currently at approximately -$16.59 million, compared to approximately -$18.1 million the previous day.
A negative net spot market flow typically indicates that more tokens are flowing out of exchanges, with buyers absorbing positions at lower prices. A rebound in spot buying helps cushion the short-term impact of futures liquidation, but its effect is currently limited.
In the short term, market sentiment remains a key factor.
After a continuous decline, the DOGE momentum indicator has weakened significantly. The report mentions that its relative strength index has entered oversold territory, indicating that bears still dominate short-term price movements.
If panic selling in the futures market continues, DOGE may test the $0.08 level further. If leveraged selling pressure eases and spot buying continues to flow back, the price could return to around $0.094 and retest the $0.1 level.
