Concerns Grow for Dogecoin as Active Addresses and Social Engagement Decline Amid Market Volatility

• Dogecoin (DOGE) faces significant headwinds as declining active addresses and low social media engagement signal challenges ahead for the cryptocurrency.

• With a 20% drop from its recent peak, DOGE’s troubles are compounded by $37.15 million in liquidations, primarily affecting long positions as traders react to market volatility.

• “Amidst falling on-chain activity, the outlook for DOGE appears increasingly bearish,” noted a recent analysis from COINOTAG.

Dogecoin struggles with low engagement and market pressures, yet faces a potential recovery as new price support levels emerge. Read on for a detailed analysis.

Social Media Engagement Dries Up as Bearish Trend Drives Prices Lower

Recent data reveals a sharp decline in Dogecoin’s social media engagement, a crucial metric for gauging market sentiment and investor interest. After a peak of daily active addresses in November, activity has plummeted back to levels reminiscent of January, illustrating a decrease in user interaction. This trend, coupled with diminishing social dominance—a ratio highlighting the cryptocurrency’s presence in social conversations—suggests that without a significant shift in price momentum, both attention and investment will likely continue to wane.

The Impact of Funding Rates on Market Sentiment

Moreover, current funding rates have dipped into negative territory, indicating a market environment increasingly favorable for sellers. This situation emerges despite previous attempts by bulls to maintain upward pressure on prices. According to data from Coinglass, negative funding rates have historically preceded short-term price recoveries, hinting that while market sentiment remains bearish, there could still be opportunities for tactical rebounds in the coming days.

Technical Analysis: Price Levels to Watch

An in-depth look at the DOGE/USD trading chart reflects persistent selling pressure that has defined the market since December. With the On-Balance Volume (OBV) steadily declining and the Relative Strength Index (RSI) remaining below the neutral threshold of 50 since January, the technical indicators continue to favor a bearish scenario. As for support levels, the recent price action indicates that the $0.131 and $0.102 thresholds, established in October 2024, are critical for the near-term price performance.

Should DOGE manage to bounce off the $0.131 support level, it could potentially reach between $0.154 and $0.164; however, any recovery should be viewed with caution as the overall trend suggests continuing bearish momentum.

Conclusion

The combination of waning social media interest, negative funding rates, and persistent selling pressure presents significant challenges for Dogecoin. Investors must navigate cautiously as critical support levels are tested, and future price developments lean towards bearish outcomes. While short-term bounce potential exists, the overarching market sentiment remains bearish, necessitating patience among traders and investors alike.