Dogecoin Plunges Double Digits in Market-Wide Correction

Dogecoin's price has plummeted by double digits, erasing most of its recent gains and plunging into the red along with the broader market. The decline follows a negative market reaction to data showing a rise in manufacturing activity without corresponding job growth or price reduction. Dogecoin's drop mirrors Bitcoin's 5% decline, underscoring its sensitivity to market fluctuations.

Dogecoin Suffers Double-Digit Decline Amid Market Correction

The Dogecoin market has taken a significant hit today, with its price plummeting by double digits after an eventful week marked by upward movement. This sharp correction has erased a substantial portion of its recent gains, pushing the cryptocurrency into the red alongside the broader market.

Factors Driving Dogecoin's Downturn

The Dogecoin price's precipitous fall cannot be attributed to any single event specific to the cryptocurrency. Instead, it is part of a market-wide decline that originated with Bitcoin, the dominant force in the digital asset landscape.

Following the release of the March manufacturing data in the United States, the market reacted negatively. The report indicated an uptick in manufacturing activity for the first time in two years, but it also revealed a lack of corresponding growth in employment at these factories. Moreover, the data pointed to rising prices, sparking concerns among investors.

As a result, the Bitcoin price tumbled by approximately 5%, triggering a deeper sell-off in altcoins, including Dogecoin. Bitcoin's value temporarily dipped below $66,000, seeking stability around that level. Dogecoin, meanwhile, plummeted by 10% before finding support above $0.18.

Dogecoin's Correlation with Bitcoin

Dogecoin's price movements are heavily influenced by the performance of Bitcoin. As the market leader, Bitcoin's fluctuations often dictate the direction of other cryptocurrencies. In this case, a recovery in the Bitcoin price would likely lead to a rebound in Dogecoin, while a continued decline could prolong the current market downturn.

Dogecoin's Recent Bullish Momentum

Prior to this week's correction, Dogecoin had experienced a surge of approximately 10%, reaching a new three-year high above $0.22. This upward movement was fueled by excitement surrounding Elon Musk's X (formerly Twitter), which recently integrated Dogecoin as a payment method on its platform.

The social media giant's acquisition of additional money transmitter licenses in the United States raised speculation of impending DOGE payments on X. This, coupled with anticipation of Musk potentially resuming his Dogecoin-related tweets, contributed to the price rally.

Furthermore, the announcement by Coinbase, the largest cryptocurrency exchange in the United States, that it would launch a perpetual trading contract for DOGE fueled the upward momentum. This led to a record high in Dogecoin's open interest of $1.77 billion, indicating a strong interest in the meme coin.

Bullish Sentiment Remains

Despite the market correction, bullish sentiment persists around Dogecoin. Crypto analyst Ali Martinez believes that Dogecoin's price will continue to rise, even suggesting it could reach as high as $12 as the bull market progresses.

Conclusion

The Dogecoin price's double-digit drop is a reflection of the broader market correction triggered by concerns over economic data and rising prices. While this setback has erased some of Dogecoin's recent gains, bullish sentiment remains strong, with analysts predicting further price appreciation in the long run. Dogecoin's fate remains tied to the performance of Bitcoin, and any recovery in the market leader could provide a boost to the meme coin's value.