ambcrypto.com 
The broader crypto market extended its bearish streak. As a result, Dogecoin weakened further, breached the $0.09 support, and fell to $0.081.
The memecoin last reached such low levels during the February market dip. At press time, Dogecoin traded at $0.085, down 5.3% on the daily charts, adding to its 12% weekly slip.
The price slip triggered the massive liquidation of leveraged positions. Dogecoin [$DOGE] saw a total of $6.4 million in positions liquidated, with $5.3 million in longs liquidated.
Source: CoinGlass
The liquidation of leveraged longs to such levels causes exchanges to close positions and cut losses. As a result, the market sees additional selling pressure, causing further market slip.
Dogecoin Futures panic close amid liquidation risk
Driven by a surge in liquidations, traders in the Futures market panicked and hurriedly closed their positions.
According to CoinGlass data, Dogecoin saw $755 million in Futures Outflows while only $696 million in inflows. As a result, Futures Netflow dropped to -$58.9 million.
Source: CoinGlass
A negative Futures Netflow suggests that sellers dominated the market, as they closed positions. The memecoin’s Open Interest fell to $1.02 billion, the lowest level since March, further confirming this shift in bearish sentiment.
Source: CoinGlass
Dip buyers jump on the Spot
Interestingly, while leverage got flushed and Futures panic exited, the market dip created a buying opportunity. As such, on the Spot market, buyers returned to accumulate at a discount.
As a result, Spot Netflow extended its bullish outlook, holding negative for four consecutive days. At press time, Netflow was -$16.59 million, a slight drop from -$18.1 million the previous day.
Source: CoinGlass
A Negative Netflow indicated that buyers dominated exchanges and continued to accumulate at lower price levels. Often, when Spot buyers jump in, they present the market with a fighting chance by absorbing pressure from Futures.
What’s next for the memecoin?
Dogecoin’s downward momentum intensified after leveraged longs were liquidated. Succeeding selling pressure caused further market weakness.
As a result, the memecoin’s Relative Strength Index (RSI) dropped into the oversold zone, touching a low of 24. RSI at these levels suggested that sellers have total control of the market.
Source: TradingView
As such, even dip buyers in the Spot market remain insufficient to absorb the prevailing market pressure. Under such conditions, $DOGE is at risk of more losses.
If the prevailing sentiment persists, Dogecoin is likely to make more losses on its price charts and breach the $0.08 support level.
However, if Futures panic cools off amid the dip-buying witnessed, the market will cool down and revisit $0.094, then eye $0.1.
Final Summary
- Dogecoin dropped 5%, hitting a four-month low of $0.081, amid intense bearish pressure.
- The Spot market saw renewed demand as dip buyers returned to accumulate at lower price levels, but the market remains overly bearish.
