The popular meme coin, Dogecoin, has pierced below the psychological level of 0.13 dollars after intense selling pressure. This technical move suggests that the Dogecoin price today faces an uncertain outlook due to increased derivatives activity. According to BitMEX data, futures volume skyrocketed 53,000%, reaching 260 million dollars.
Shaurya Malwa, analyst at CD Analytics, noted that the breakout occurred during the U.S. session on December 23. The fall below this fundamental floor occurred with a trading volume 101% higher than the average. In this way, the buyers who defended the level withdrew, allowing the supply to dominate the price action. Therefore, the current structure shows a descending channel that pressures the asset towards local lows.
Likewise, implied volatility has grown considerably while the spot price shows persistent weakness on the charts. Traders are using meme coins as high-sensitivity expressions to shifts in general sentiment. For which reason, moves tend to be drastically amplified when rounded support levels are broken. This market dynamic usually generates chain liquidations that accelerate the corrections of the digital asset.
The impact of derivatives activity on Dogecoin’s volatility
On the other hand, the massive increase in futures volume reflects a preparation for sharper moves. Investors must be alert to the signals emitted by high-leverage exchange platforms. Since open interest remains high, any recovery attempt could face resistance considerably in the 0.13 dollar area. However, the market remains attentive to a possible recovery of this pivot level.
Furthermore, if the asset fails to recover the mentioned level, it could seek liquidity at lower levels. The next demand cluster is located approximately between 0.1285 and 0.1280 dollars in the short term. So the cryptocurrency market experiences a phase of technical readjustment after the strong increase in speculative activity. Many analysts agree that the current volatility is a double-edged sword for retail traders.
Will Dogecoin be able to regain the psychological level to avoid a further fall?
However, a sustained close above 0.13 dollars could trigger a short-covering bounce. This scenario would drive the price towards 0.1320 dollars, alleviating the bearish pressure that currently dominates the market. Therefore, the behavior of the asset in the coming hours will be decisive in defining the end-of-year trend. Technical indicators suggest that the battle between bulls and bears is far from over.
Finally, Dogecoin’s situation reflects the fragility of assets with high dependence on social sentiment. The loss of key supports usually invalidates short-term bullish theses in these volatile markets. For which reason, the success of a recovery will depend directly on the entry of new institutional and retail capital. Monitoring liquidation levels will be fundamental for investors looking to position themselves in this changing environment.
