Dogecoin's rise faces a harsh reality as the memecoin dropped nearly 10% within a day, reaching as low as $0.3411 today (Wednesday). The decline comes as the broader cryptocurrency market faces a bear market, with Bitcoin currently trading at $95k from around $102k the previous day.

A mix of macroeconomic concerns and bearish technical patterns suggests further downside for Dogecoin in the weeks ahead. Dogecoin's fall coincides with a market-wide sell-off in risk assets, including U.S. equities Equities Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Read this Term.

Macroeconomic Headwinds

The trigger of the current sell-off could be the strong U.S. economic data, such as the ISM services report and JOLTS job openings, highlighting persistent economic robustness, Cointelegraph reported.

This data shifted investor expectations, eroding hopes for Federal Reserve rate cuts before mid-2025. The benchmark 10-year U.S. Treasury yield spiked to its highest level since May 2024, further discouraging risk-taking behavior.

At the time of publication, DOGE traded for $0.3466, representing a price drop of 5% and 9%, in the past day and week, respectively. According to CoinMarketCap data, the memecoin's market cap has dropped 5% to around $51 billion, ranking seventh in the crypto list.

The crypto market has experienced heightened volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term recently. According to Coinglass, Dogecoin liquidations in the past 24 hours amounted to $19.84 million. Of these, $15.72 million were long positions, while $5.12 million were short positions.

Liquidation events occur when leveraged traders are forced to close positions as prices drop. Dogecoin's current price action aligns with its technical outlook, which also points to a downward momentum.

Dogecoin's current price action aligns with a classic bull flag pattern. On the daily chart, the price is currently below the 50-moving average, although it remains above the $200 moving average. The price dropped from $0.3950 on Jan 5 to $0.3439.

Technical Analysis

Currently, DOGE is trading at an important support level on the daily chart. If this support level does not hold, the next level to watch is $0.3140. The Relative Strength Index is at 48, meaning it remains above the oversold zone, and further downward momentum could be seen before any change of sentiment.

On the weekly chart, things are no different. The price has formed a bearish candle stick after bouncing off the $0.3117 support level. Despite the bearish outlook, Dogecoin retains the potential for a strong rebound.

If the price can rise above $0.3937, it could welcome a positive price movement. However, macroeconomic challenges, including rising Treasury yields and liquidation pressures, continue to cloud the immediate outlook for DOGE and other cryptocurrencies.