Dogecoin (DOGE) Poised for a Significant Price Decline, Targeting the $0.22 Level

Dogecoin [DOGE], the world's largest and most popular meme coin, is poised for a significant price decline as it has formed a bearish price action pattern.

Dogecoin (DOGE), the meme coin that has captivated the crypto world, might be heading toward a significant price drop. A technical analysis by AMBCrypto reveals a bearish price action pattern forming.

On December 26, the broader crypto market experienced a price decline, including Bitcoin (BTC), Ethereum (ETH), and XRP, shifting the market sentiment toward a downtrend.

Several factors are contributing to DOGE’s bearish outlook, including the overall market sentiment, traders’ bearish activity, and bearish price action.

Dogecoin technical analysis and key level

According to the analysis, DOGE is at the edge of breaking down from a small consolidation zone, formed after failing to hold the support level at $0.35.

The meme coin, battered by the recent price decline, has found itself clinging to the lower boundary of the consolidation zone at the $0.30 mark.

Now, here's the crucial part. If DOGE fails to hold this lower boundary and closes a daily candle below the $0.30 level, technical analysis suggests a potential 25% decline for the meme coin, bringing it down to the $0.22 level.

It's important to note that DOGE's bearish thesis will only be valid if it closes a daily candle below the $0.30 level, otherwise, the bearish scenario may fizzle out.

DOGE's bearish on-chain metrics

This bearish price action has influenced traders' sentiment. According to on-chain analytics firm Coinglass, DOGE's Long/Short Ratio stood at 0.71 as of press time, the lowest since the beginning of December 2024.

A ratio below 1 indicates strong bearish market sentiment among traders. Data reveals that 58.3% of top DOGE traders held short positions at this point, while 41.7% held long positions.

Besides traders' bearish outlook, long-term holders appeared to be accumulating the asset from exchanges, as evident from Coinglass data.

DOGE's spot inflow/outflow at exchanges has shown a significant outflow of $32.75 million in DOGE. This substantial outflow indicates an ideal buying opportunity and suggests potential upside momentum in the future.