Dogecoin Traders Close $106M Positions as XRP, BCH Emerge Top Gainers

Dogecoin price stumbled toward $0.12 on July 31, down 14% in 10-days with rival altcoins on the uptrend this week, markets data shows bear traders closed out over $100 million worth of DOGE futures contract positions.

13% Decline Sees Dogecoin Decouple from Market Uptrend

On July 31, Dogecoin price stumbled below the $0.125 marking a new weekly timeframe low. Curiously, the downtrend means DOGE has now decoupled from the positive trends in the altcoin markets, which have received a demand boost since Donald Trump’s appearance at the Bitcoin Nashville conference.

Dogecoin price has reached a monthly peak of $0.14 on July 21, but over the last 10-days, it has remained a steep 14.35% decline as it tumbled towards $0.12 at the time of writing on July 31.

Looking at the chart above, we see that Dogecoin’s current downtrend began around July 22, as short-term traders looked to capitalize on the market buzz around Ethereum ETF launch to book profits.

Undoubtedly, Donald Trump’s bullish speech at the weekend has lifted investor sentiment across the crypto markets. However, recent market events suggest that investors are leaning towards BTC and mega cap altcoins that could potentially benefit from a less-hostile regulatory landscape in the USA.

Consequently, the likes of XRP and Bitcoin Cash (BCH) have scored sizeable gains within the weekly timeframe, while the meme coin sector now appears to have been left behind on the current bullish market phase.

DOGE Traders Clear $106M Positions as Bearish Sentiment Grows

The bearish sentiment surrounding DOGE, the world’s largest meme coin by market capitalization, currently appears to be driven by internal bearish catalysts.

With demand running low, market data nows shows that Dogecoin short-term traders are now looking to exit, and possibly re-allocate capital towards tokens showing more vibrant price action this week.

Coinglass’ Open Interest chart below, which represent the total value of active Dogecoin futures contracts, provides a clear indication of this.

At the time of publication on July 31, Dogecoin Open Interest stands at $651 million. But zooming out we see that this represent a $106 million decline from the monthly peak of $757 million recorded on July 22.

When an asset’s Open Interest takes such a large plunge during an altcoin market uptrend, it flashes a major bearish signal. First it suggests that many short-term speculative traders are exiting their DOGE positions. If they opt to re-allocate capital towards better performing assets, Dogecoin price downtrend will likely persist.

DOGE Price Forecast: Can Bulls Hold $0.10 Support?

Dogecoin (DOGE) is currently trading at $0.12615, experiencing a modest gain of 0.53% in the past 24 hours. The technical indicators on the chart suggest a cautious outlook for the bulls.

The Donchian Channel shows the price oscillating within the range of $0.10486 to $0.14362, indicating significant volatility and potential for further price fluctuations.

The Balance of Power (BOP) indicator currently reads 0.20, suggesting that buyers have a slight advantage over sellers. However, this advantage is not strong enough to indicate a clear bullish trend.

The recent price action shows DOGE struggling to break above the resistance level of $0.14362, which is marked by the upper boundary of the Donchian Channel. This resistance level is crucial, and a failure to overcome it could lead to increased selling pressure.

On the downside, the key support level to watch is $0.10486, as indicated by the lower boundary of the Donchian Channel. If the price drops below this level, it could trigger a more substantial decline, potentially testing the psychological support level at $0.10.

In summary, while the Balance of Power suggests some buying interest, the inability to break above the resistance at $0.14362 combined with the vulnerability of the $0.10 support level indicates a bearish outlook for DOGE.

Bulls must defend the $0.10 support level to prevent further downside and to have any chance of reversing the current bearish trend.