Dogecoin Dips Below $0.2: Will the $0.17 Support Zone Hold?

Dogecoin dips below $0.20 amid a broader meme coin market correction, testing the critical $0.17 support zone. Are the bears about to take control?

With the crypto market pulling back, the meme coin sector has seen a 5% decline in market capitalization over the past 24 hours, falling to $60.47 billion.

As the broader market corrects, Dogecoin is down nearly 10% in the same timeframe, breaking below the psychological $0.20 level. Will this pullback in the largest meme coin lead to a breakdown of the $0.17 demand zone?
Dogecoin Price Analysis
On the daily chart, Dogecoin’s price action reveals a bullish failure to maintain the uptrend seen earlier this week. After facing strong rejection at the 100-day EMA of $0.2043, the meme coin has taken a bearish turn, with a third consecutive red candle forming.

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Dogecoin is now trading below the 23.60% Fibonacci retracement level at $0.17718. Its current market price is $0.1740, reflecting a 3.95% drop on the day.

As the pullback intensifies, pressure is building on the local support trendline and the $0.17 demand zone. While optimistic traders are looking for a potential double-bottom reversal at $0.17, the broader market sentiment increases the risk of a breakdown.

The MACD and signal lines have failed to form a bullish crossover and continue to trend downward, with a rising number of bearish histogram bars. Additionally, the continued decline in the 50-, 100-, and 200-day EMAs reinforces the bearish outlook.

According to Fibonacci levels, a deeper pullback to $0.1298 is possible. However, price action analysis suggests minor support at $0.1529. On the flip side, a potential reversal could target the 50-day EMA at $0.1976.
Bearish Imbalance in Dogecoin Derivatives
As the broader market sell-off gains momentum, optimism in Dogecoin derivatives is fading. According to Coinglass data, open interest has dropped by 14.17%, falling to $1.80 billion.

Bullish sentiment among derivatives traders is also weakening, as reflected in the OI-weighted funding rate, which has declined to 0.0009%. 

Notably, the past 24 hours have seen a significant wipeout of bullish positions, with $24 million in long liquidations, compared to just $1.6 million in short liquidations.

This has created a bearish imbalance in Dogecoin’s open interest, with the long/short ratio dropping to 0.9084.