Dogecoin Drops 30% Amid Geopolitical Tensions, Analysts See Potential Comeback

Dogecoin, the popular meme cryptocurrency, has recently experienced a significant drop of 30% in its value. This decline has sparked discussions among investors and analysts about the possibility of a comeback similar to the one witnessed in 2021. The recent drop in Dogecoin's value can be attributed to heightened geopolitical tensions, which have shaken the broader cryptocurrency market. The uncertainty surrounding global events has led to a sell-off in riskier assets, including cryptocurrencies.

The geopolitical tensions, particularly the escalating conflict between the United States and Iran, have created an atmosphere of uncertainty. This has led to a decrease in investor confidence, resulting in a sell-off of cryptocurrencies. The heightened tensions have caused investors to seek safer havens for their investments, leading to a decline in the value of Dogecoin and other cryptocurrencies.

Despite the recent drop, some analysts believe that Dogecoin could experience a comeback similar to the one seen in 2021. The cryptocurrency market is known for its volatility, and sudden drops in value are often followed by sharp recoveries. The 2021 rally in Dogecoin was driven by a combination of factors, including increased media attention, celebrity endorsements, and a surge in retail investor interest. If similar factors come into play, Dogecoin could potentially experience another significant rally.

Dogecoin finished 2024 with a 287% rally, closing the year at $0.31. That spike wasn’t loud, but it grabbed attention. Retail traders came back, slowly. The memecoin climbed back into the crypto top ten. Then came the recent 30% slide, knocking DOGE below the key $0.20 level. At first glance, that sounds like trouble. But when you zoom out, it starts to feel strategic. Analysts believe this drop may not signal weakness. Instead, they see accumulation—careful buying as weaker hands exit.

Dogecoin’s history backs that idea. Before the 5,000% run in 2017 and the 21,000% explosion in 2021, DOGE drifted sideways. For nearly a year in each cycle, the price stayed flat. Then, out of nowhere, it erupted. Right now, the structure matches that exact setup. Also, Open Interest dropped from $3 billion to $1.74 billion this month. That suggests leverage flushed out, not confidence. When aggressive traders exit, room opens for a healthier rise.

The Exchange Supply Change metric supports the bullish case. Since early June, DOGE has seen steady outflows from major platforms. That usually points to investors pulling tokens into private wallets, not selling. Wallet activity gives more clues. Active DOGE addresses just jumped to 118,000—up from under 80,000. That kind of increase rarely happens during a true capitulation phase.

Dogecoin may not be moon-bound yet, but the signs don’t scream doom. The current phase could mark a reset, not a collapse. The market is absorbing the shakeout, letting retail panic fade and bigger players move in. If DOGE holds above key support and speculative pressure stays low, history could repeat. The setup shows potential. Liquidity has been flushed. Exchange supply keeps shrinking. On-chain data is turning bullish.

DOGE may be writing a familiar story—again. Dogecoin isn’t dead. It’s resting, maybe coiling for another shot at the moon. While price dipped, structure strengthened. The patient might win this round. If past cycles mean anything, DOGE’s silence today could erupt into tomorrow’s roar.