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Dogecoin (DOGE), the king of the meme coins, has surged by 197% in trading volume despite battling price volatility. According to CoinMarketCap data, Dogecoin’s volume hit $1.29 billion in the process as transactions increased on the DOGE market.
Dogecoin trading volume surge sparks speculation
Dogecoin’s overall outlook might be bearish, but the spike in trading volume has the potential to trigger a recovery. Notably, when the meme coin’s volume is reduced, it often amplifies price swings on the market.
Given that liquidity in the crypto space has dropped lately, Dogecoin is more prone to market sell-offs. Retail traders looking for quick funds might choose to offload DOGE and cut their losses. However, if trading volume continues to soar, it could signal a revival of retail interest in the meme coin.
The development could lead to price stabilization for Dogecoin, whose weekly loss stands at over 5.19%. In the last 24 hours, DOGE has fluctuated between an intraday low of $0.1178 and a peak of $0.1234. As of press time, Dogecoin is exchanging hands at $0.1211, which represents a 1.72% decline within this period.
Dogecoin’s decline is not unique, as the broader crypto market fell by 1.02%. Clearly, DOGE is underperforming the market, and this could be because Bitcoin (BTC) has also slipped within this time frame. DOGE’s coupling with Bitcoin often triggers a significant decline in the meme coin when BTC drops.
Additionally, Dogecoin’s technical chart shows that its price currently sits below crucial moving averages. This has increased the bearish outlook as selling pressure grows. The Relative Strength Index (RSI) of the meme coin is at 34.66, signaling downward pressure, but it has yet to slip into the oversold territory.
This suggests that the bearish momentum could linger for a while unless a major shift occurs. The confirmation of a death cross recently adds to DOGE’s woes and leaves a fast recovery in doubt.
Death cross and open interest signal market tension
It is worth mentioning, though, that at the time the death cross was confirmed, volume was in the red at a 43.12% drawdown. Now, that metric has flipped green. How this could impact the meme coin remains to be seen.
Meanwhile, within the last 48 hours, some Dogecoin investors are betting positively on the asset.
DOGE’s open interest saw a slight 0.2% increase as traders committed $1.41 billion in DOGE. Although it is a modest commitment, it is likely to trigger stability in the price outlook.
If DOGE climbs amid this surge in trading volume, it could cause a significant breakout in price.