Dogecoin (DOGE) Price Plunges 16% as Network Activity Collapses

Crypto analyst Ali Martinez highlighted that DOGE's network activity has collapsed by 95%, a major red flag for its long-term stability.

Dogecoin (DOGE) price is testing a key support level as it faces pressure from technical indicators and derivatives data.

What Happened: Dogecoin’s rejection at $0.2428 resulted in a fall to $0.2104, where a Doji candle formed, indicating indecision among traders. As the price hovers near the $0.20 psychological support, traders are bracing for extreme volatility.

With multiple exponential moving averages (EMA) turning negative, the bearish outlook is being reinforced. The 50-day and 100-day EMAs have crossed to form a ‘death cross,’ a historically bearish signal.

Moreover, the 20-day and 200-day EMAs remain in a negative alignment, incrementally reinforcing downward pressure on the price.

However, the RSI (Relative Strength Index) is now in oversold territory, which could indicate a potential relief bounce. If DOGE can manage to reclaim the $0.21 resistance, a short-term push toward $0.24 could be on the table.

But if the price slips below the $0.19 support, the next target could be as low as $0.06, according to crypto analyst Ali Martinez.

Why Is This Important: Dogecoin price has plunged 16% over the past week, testing critical support levels. The meme coin market cap has dropped to $58.15 billion.

If the price falls below $0.19, the probability of a deeper correction toward $0.06 will increase significantly. The last time Dogecoin saw a similar drop in active users, it was followed by a brutal selloff.

The cryptocurrency is also showing signs of exhaustion as its network activity collapses.

As highlighted by crypto analyst Ali Martinez, the number of active addresses on the Dogecoin network has decreased sharply. In November 2024, the network activity reached 2.66 million. However, that number has since plummeted to just 130,282.

This marks a 95% decline in active users on the Dogecoin network.

"This level of inactivity is staggering and could have serious implications for the long-term stability of Dogecoin."

The crypto is now trading at $0.20, a crucial Fib level that could determine the next major move for DOGE.

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The technical analysis on Benzinga Pro reveals that Dogecoin is showing signs of bearish pressure. The price has been rejected at key resistance levels and is now testing support.

The RSI is also showing that the price is oversold, which could lead to a bounce in the near term. However, the MACD is still showing bearish momentum, which could lead to further declines in the long term.

Overall, the technical analysis suggests that Dogecoin could be setting up for a rebound in the short term, but the long-term trend remains bearish.