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Dog-themed cryptocurrency Dogecoin is performing a crucial support test, having reached a low of $0.131 in the early Monday session.
At press time, Dogecoin was trading down 2.04% in the last 24 hours to $0.132 as the majority of cryptocurrencies traded in red following Bitcoin's drop below $90,000 over the weekend.
Dogecoin fell from a Dec. 9 high of $0.153, marking four out of five days in the red since this date. Amid the drop, the $0.14 key support level failed, with eyes on $0.13 as the next crucial short-term support level.
According to CoinMarketCap data, Dogecoin trading volumes have increased 77% in the last 24 hours to $1.08 billion as traders adjusted their positioning as the market fell.
What comes next?
Analysts indicate that Dogecoin might be on the verge of a textbook capitulation event as increased volume coupled with support failure might mark short-term exhaustion.
Dogecoin is now at a crossroads, with indicators highlighting a mixed bag for traders as to where it heads next.
The $0.13 psychological level is now viewed as the most important short-term support, with a sustained hold above here favoring range-trading rather than continuation. If the $0.14 level is reclaimed, Dogecoin would target $0.15 once again. Failure below $0.131 might lead to a retest of Oct. 10 flash crash low of $0.09.
On the other hand, $DOGE has seen an increase in notional open interest (OI) over 24 hours, reaching 10.80 billion $DOGE, the highest since Nov. 20 alongside moderately positive funding rates, offering quiet hope to bulls.