Why Did Dogecoin Price Drop Today? What Causes DOGE to Drop?

Bittime - The price of Dogecoin (DOGE) experienced a significant decline today. What caused the DOGE price to drop? Read the reasons behind the Dogecoin price drop and its impact in this article.

On January 8, 2025, DOGE was trading at $0.3501 (around IDR 5,600), after dropping more than 10% in a very short period of time. This incident certainly surprised many investors. 

In particular, this price decline occurred after a bullish period which saw the price of DOGE skyrocket to reach $0.4 (around Rp. 6,440). 

So, what actually caused the price of Dogecoin to fall today?  This is the analysis.

Reasons Dogecoin Price is Down Today

1. Profit Taking by Investors

One of the main reasons behind the decline in Dogecoin prices is profit taking by investors. After a significant rally that saw DOGE soar to $0.4, many investors decided to sell their assets and take profits. 

This usually happens after a cryptocurrency experiences a long bullish period, where the price rises rapidly. Usually, after reaching the highest point, the market will experience a correction. 

Where, the coin price will fall due to the large number of sales made by DOGE holders who want to realize their profits.

Read also: Finally, Dogecoin is predicted to rise to $1 in 2025

2. Increased Trade Volume

Even though the price of Dogecoin has decreased, DOGE trading volume actually increased significantly, with an increase of 43.69% to $3.81 billion (around Rp. 61 trillion). 

This increase in trading volume shows that even though prices are falling, trading activity is still quite high. 

Many investors may be taking advantage of lower prices to buy DOGE, or perhaps they are preparing for greater market volatility in the near future.

3. Market Sentiment Influenced by Social Media

Market sentiment plays a big role in Dogecoin price movements. As is known, DOGE is highly influenced by trends on social media and influential figures, such as Elon Musk. 

Although there is currently no direct indication that Elon Musk or any other major figure is influencing the market, highly volatile market movements can be influenced by expectations related to major events. 

An example is the inauguration of Donald Trump's new administration, which is expected to trigger further volatility.

Read also: Dogecoin and Altcoin Receive Scorching Criticism from the Bloomberg Analyst Team, What's the Reason?

4. Technical Bearish

Technical analysis shows that DOGE is likely experiencing a breakout from the bearish pennant pattern. The pennant pattern usually indicates trend continuation, but when the price breaks out of this pattern towards the bottom, it can be a sign of a deeper price decline. 

Some market observers, such as KrissPax at

5. Impact of the General Crypto Market Decline

The global crypto market is currently experiencing a downturn. This is because many large digital assets such as Bitcoin (BTC) and Ethereum (ETH) are also experiencing price declines. 

The decline in the price of this main crypto asset often has a negative impact on other cryptocurrencies, including Dogecoin. 

For example, when Bitcoin goes down, usually altcoins like Dogecoin will also be affected, because many investors choose to withdraw their funds or shift their investments to more stable assets.

Read also: Dogecoin ATH: Last Time Breaking ATH was in May 2021!

Conclusion

The decline in Dogecoin prices that occurred today could be the result of several interacting factors. 

Profit taking after a bullish period, coupled with market sentiment influenced by social media trends and bearish technical patterns, has seen DOGE experience a significant decline. 

Nonetheless, the high trading volume suggests that there are still many investors interested in Dogecoin, either to take advantage of the price drop or wait for potential further increases. 

FAQs About Dogecoin

1. What is Dogecoin?

Dogecoin (DOGE) is a cryptocurrency that was originally created as a joke or meme, but over time, DOGE has developed into a fairly popular digital currency. 

2. Why is Dogecoin price down today?

The price of Dogecoin can fall due to several factors, including profit taking by investors after a significant price increase, market sentiment influenced by social media and famous figures, and an overall market correction. 

3. What affects the price of Dogecoin?

The price of Dogecoin is affected by many factors, including supply and demand in the market, market sentiment, technological developments, and news related to Dogecoin. 

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Reference 

coinmarketcap, Dogecoin Coinmarketcap, accessed January 8, 2025.

MSN, Dogecoin price drops suddenly: what’s happening?, accessed January 8, 2025.

Author: Y