Dogecoin (DOGE) Price Prediction: DOGE Struggles Below Key Support Levels as Bearish Momentum Dominates

Dogecoin's open interest has plummeted to $1.42 billion, a stark contrast to its April peak of $12 billion. A sustained drop in OI, particularly during DOGE's recent price decline to $0.32, points to traders unwinding positions amid reduced optimism.

Dogecoin's open interest (OI) has witnessed a significant decline, dropping to $1.42 billion, a stark contrast to its April peak of $12 billion. This sustained decrease in OI, especially amid DOGE's recent price decline to $0.32, indicates that traders are unwinding positions as optimism wanes.

According to Santiment, this bearish trend in OI often points to diminishing confidence in short-term price recovery.

Coupled with a 20% drop in DOGE's price over the past week, the shrinking OI suggests traders are cautious about opening new positions, signaling the potential for further correction unless market sentiment reverses.

Meanwhile, the mass divergence indicator average (MDIA) highlights stagnation and cautious sentiment in the DOGE market.

The MDIA indicates that Dogecoin holders are choosing to hold rather than trade their assets. This metric, which tracks the average age of coins on a blockchain weighted by purchase price, has been steadily rising, currently at 335 days.

This trend suggests that long-term holders are not actively trading or reallocating their assets, indicating stagnation within the market.

Historically, a rising MDIA has correlated with reduced liquidity and lower demand, which is often interpreted as a bearish signal.

If this upward trajectory persists, it underscores a lack of fresh capital or speculative activity in the DOGE market, which aligns with its recent price declines and suggests that bearish sentiment dominates Dogecoin's short-term outlook.