Dogecoin has experienced a significant decline in the past few hours, facing a sharp selloff near resistance levels. This drop was triggered by a statement from Elon Musk, the head of the Department of Government Efficiency (DOGE), clarifying that the U.S. government does not intend to adopt the widely-known memecoin, Dogecoin.
Dogecoin’s Netflow Trends Negative
Recently, Dogecoin’s price has taken a hit, significantly impacting various on-chain metrics. According to data from Coinglass, Dogecoin saw over $9 million in total liquidations. This breakdown included $6.5 million from buyers closing long positions and $2.55 million from sellers ending their positions.
Moreover, Dogecoin’s open interest, which measures the total outstanding trading positions, fell by 1.44%, dropping to around $1.6 billion. This decline followed an announcement by Elon Musk, clarifying that his government initiative, the Department of Government Efficiency (DOGE), is not affiliated with the meme coin. This clarification came after a mix-up on a website showed the Dogecoin mascot, which temporarily sent Dogecoin’s price soaring by 14% in February.
Also read: Elon Musk Says US Government Won’t Use Dogecoin, Price Dips 5%
Elon Musk shared that the initiative was originally to be called the “Government Efficiency Commission” but was renamed following public feedback. The name coincidentally shares an acronym with Dogecoin, showing Musk’s well-known fondness for Dogecoin.
However, the recent denial of any endorsement from Elon Musk has created a mixed sentiment in the market. This has made DOGE traders losing their hope, resulting in a sharp decline in its price.
Coinglass data indicates that Dogecoin has seen a significant outflow of $4.2 million from exchanges in the last 24 hours, signaling that many holders are withdrawing their holdings. Despite the recent dip in price, this movement suggests that investors are seizing the opportunity to accumulate more Dogecoin. Such activities could potentially stabilize and boost the DOGE price if buying pressure continues to build during these lower price levels.
What’s Next for the DOGE Price?
Dogecoin has dropped below the EMA20 trend line, indicating that the sentiment remains negative. However, buyers are strongly defending a drop below the $0.16 level. As of writing, Dogecoin trades at $0.167, declining over 0.56% in the last 24 hours.
The declining 20-day EMA ($0.171) and the RSI below the midpoint suggest a bearish sentiment in the short term. The DOGE/USDT pair may aim for a retest of $0.143 support level. A drop from this level could send the price toward $0.11.
On the other hand, if the price turns up from the current level and breaks above the 50-day SMA, it will signal that the bulls are trying to form a higher low. If buyers push the price toward EMA trend lines, it will increase the possibility of a break above $0.2 resistance line.
If buyers maintain the momentum within the resistance zone at $0.25, Dogecoin could attempt a rise toward $0.29.
