The cryptocurrency market stumbled into January 2025, with major tokens posting steep losses. Dogecoin (DOGE) was hit hard, initially rallying early in the year before a sharp drop wiped out its gains.
While the world’s most popular memecoin has slightly recovered today, technical indicators point to a bearish outlook in the short term.
Market Cap Losses and Sentiment Dip
After a sharp rally, the price of DOGE has retraced 19 % since its $0.396 peak at the start of the year. Dogecoin surged from $0.314 to just under $0.40 by January 7, only to reverse course and sink back to $0.314 on Thursday, erasing its early-year gains. Analysts attribute a 28% market value decline to shifting investor sentiment and broader cryptocurrency market trends.
“Crowd sentiment has been near its lowest point over the past year,” noted Santiment, a leading blockchain analytics firm.
The firm revealed that crowd sentiment for Dogecoin is currently at a 1 out of 5 low, indicating a lack of optimism among retail investors.
“This means there is actually some nice upside to be a daring contrarian toward DOGE (in particular) if crypto markets begin to trend upward again,” Santiment added.
Large investors are ramping up interest in Dogecoin despite its recent drop, with transactions exceeding $100,000 seeing a marked uptick—hinting at potential short-term price rebounds.
Technical Indicators Bearish
The $0.333 support area is showing strong technical significance, as this level aligns with historical support zones and has previously acted as a key demand area during market corrections.
Technical indicators like MACD, however, are nearing the bearish crossover on a daily timeframe, while the RSI stays slightly below 45.
The asset is trading below its 50-day Simple Moving Average (SMA), which crossed below the 100-day SMA on January 9—a bearish signal that suggests further downside potential.
Funding rates for Dogecoin remain predominantly negative across major crypto exchanges, signaling that short sellers currently outnumber buyers in the market.
On the Flipside:
- From a longer-term perspective, some traders and analysts are hoping that Dogecoin (DOGE) could finally reach the long-anticipated $1 mark in 2025.
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