Dogecoin Plummets 41% Amid Memecoin Sector Sell-Off

Dogecoin, the leading memecoin, experienced a significant decline, dropping 41% from March 3 to March 11, reaching a four-month low of $0.142. This sharp decrease is indicative of broader issues within the memecoin sector, as other memecoins also faced substantial sell-offs. Shiba Inu and Ethereum-based Pepe saw declines of 7% and 8% respectively, while Solana-based SPX6900 plummeted by 28%. The overall memecoin market lost $4.54 billion in value within a single day, driven by macroeconomic uncertainties and investor concerns over riskier assets.

The sell-off in Dogecoin has led to massive liquidations, with over $23.1 million in long positions being wiped out in a single day. Since February 24, a total of $161 million in long DOGE positions have been liquidated. This mass exodus of leveraged traders has caused a downward spiral, with open interest dropping by 37% in just a week. The funding rate has also turned negative, indicating that short sellers now dominate the market.

DOGE bulls have been attempting to break through a key resistance zone between $0.24 and $0.26, which includes the 50-day and 200-day simple moving averages. However, every attempt since February 3 has been met with aggressive selling, resulting in lower highs each time. If bulls fail to maintain support between $0.150 and $0.127, DOGE could potentially drop to $0.10.

Historically, Dogecoin has shown resilience, bouncing back from similar lows. In October 2024, when it hit $0.127, it staged a 227% rally to $0.480. Whether Dogecoin can repeat this performance remains uncertain, but the potential for recovery is a point of interest for investors.