Is Dogecoin Expected to Hit $0.70 Again? Insights from Volume Trends
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The price of Dogecoin has struggled to reclaim its former peak values despite numerous attempts and fluctuations. The coin has experienced a cycle of testing significant resistance points while buyers endeavor to maintain support levels amidst increased selling pressure. This environment has led to notable changes in the trading volume for this meme-based cryptocurrency. Analyzing past performance suggests that the trading volume of Dogecoin may provide insights into future price movements.
DOGE Trading Volume Remains Low
Recently, Dogecoin’s trading volume has shown a declining trend alongside its falling price over recent months. This situation has resulted in a volatile market, as investors approach the space with heightened caution, negatively impacting tokens like DOGE.
Data indicates that the trading volume for Dogecoin derivatives has yet to reach even half of its level from November 2024, a time when the market was experiencing significant upward movement. Although there have been minor increases, the overall trend remains one of decline.
As of May 19, the cumulative derivatives trading volume for DOGE was only $6 billion, a stark contrast to the peak of $60.11 billion noted in November 2024, showing a decrease of approximately 90% since then.
On May 13, there was a brief surge in volume exceeding $10 billion as DOGE advocates sought to elevate prices. However, this uptick was short-lived, as subsequent sell-offs caused a drop in the trading volume once more.
Implications for Dogecoin’s Price
Historically, an uptick in derivatives trading volume has aligned with price increases for the token. This correlation was particularly evident in 2021 when Dogecoin reached its all-time high above $0.7.
Given that the derivatives volume remains low, it may lead to further declines in Dogecoin’s price. Presently, many crypto traders appear to favor shorting as a strategy regarding Dogecoin, contributing to the downward pressure. A significant change in the trading volume, similar to what was experienced in November 2024, would be necessary for a reversal.
If the trading volume can bounce back above $30 billion, there is a potential for Dogecoin to approach $0.5. However, surpassing the $0.7 all-time high would require even more substantial trading volume. Even when trading volume exceeded the 2021 peak of $24.82 billion, Dogecoin failed to breach $0.5, underscoring the need for much higher buying activity compared to 2021 for it to rise above $0.7 again.
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