Why Did Dogecoin Plummet, Is There a Growing Possibility of a $0.10 Collapse?

▲ Dogecoin (DOGE)/AI Generated Image ©

Dogecoin has plummeted after failing to break through a key resistance level, reigniting market anxiety. The atmosphere is particularly tense with concerns of further declines, compounded by high-leverage positions.

According to CoinMarketCap, a cryptocurrency market data aggregator, as of May 17 (local time), Dogecoin (DOGE) recorded a 3.50% drop over the past 24 hours, trading at $0.110. During the same period, the total cryptocurrency market capitalization decreased by 1.16%, and Bitcoin (BTC) also fell by 1%, indicating a general bearish trend across the market.

The media analyzed that this decline was a result of overall market risk aversion and technical resistance rather than a specific negative catalyst. DOGE failed to break through the major liquidity resistance level near $0.1153, where a large volume of sell orders was reportedly accumulated. The failure to break this resistance confirmed selling dominance and led to a price drop.

Leverage positions were also identified as a factor amplifying volatility. According to the on-chain analytics platform Lookonchain, a newly created wallet built a $2.25 million DOGE long position using 10x leverage. The liquidation price for this position is known to be $0.10284. The market is paying close attention to the possibility of increased selling pressure due to forced liquidation if this price level is breached.

The short-term key support level is $0.1061. If this level is maintained, DOGE is likely to continue trading within a range between $0.106 and $0.115. Conversely, if it falls below the $0.10284 liquidation level, the rate of decline could accelerate to $0.10. For a rebound, an analysis suggests that recovering the $0.1153 resistance level is first necessary.

Experts assess Dogecoin's current trend as leaning from neutral to bearish. Market attention is particularly focused on the high probability of DOGE facing additional downward pressure if Bitcoin fails to maintain its $78,000 support level.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*