Dogecoin tests make-or-break support as DOGE selloff deepens

Dogecoin DOGE continued its downward trend on Wednesday, trading below the $0.0800 level after falling 9% this week. 

The leading meme coin is now on track for its seventh consecutive week of losses as risk-off sentiment across the broader cryptocurrency market weighs heavily on speculative assets.

Weakening retail participation, declining futures activity, and a lack of institutional inflows are adding pressure to DOGE's already fragile price structure.

However, technical indicators suggest the token may be approaching a pivotal support zone that could determine its next major move.

Retail interest fades as Open Interest drops

Dogecoin appears to be losing traction among retail traders as investor sentiment deteriorates across the crypto market.

It has lost its position in the market and has dropped to the 10th spot following weeks of bearish price action.

According to CoinGlass data, DOGE futures Open Interest declined by 10% over the last 24 hours, falling to USD 1 billion (approx. $1.5 billion). 

The sharp reduction indicates traders are closing positions rather than building new exposure, reflecting reduced confidence in the meme coin's near-term outlook.

The decline comes as Bitcoin dropped below the $60,000 level, prompting investors to reduce risk exposure across the broader digital asset market.

Further evidence of weakening sentiment can be seen in Dogecoin's funding rate.

The funding rate has fallen to 0.0025%, suggesting traders are increasingly willing to pay a premium to maintain short positions. 

This dynamic typically reflects expectations for additional downside and highlights the growing bearish bias in the derivatives market.

As traders position for lower prices, speculative demand continues to fade.

Selling pressure has also intensified through a wave of liquidations.

Over the past 24 hours, DOGE futures recorded approximately USD 3.7 million (approx. $5.3 million) in total liquidations.

Of that amount, USD 3.6 million (approx. $5.2 million) came from long positions, indicating that bullish traders bore the overwhelming majority of the losses.

The imbalance shows the market's current sell-side dominance and suggests that attempts to establish a near-term recovery have largely failed.

While retail participation is weakening, institutional interest has yet to provide meaningful support.

Data from SoSoValue shows that Dogecoin-focused exchange-traded funds (ETFs) recorded zero net inflows for a third consecutive trading day on Tuesday.

The lack of fresh capital from larger investors suggests institutional participants remain cautious toward the meme coin despite its recent price decline.

Without renewed institutional demand, DOGE may struggle to establish a sustainable recovery.

Dogecoin price forecast: DOGE approaches a critical support zone

Similar to the other leading cryptocurrencies, the DOGE/USD 4-hour chart is extremely bearish.

Dogecoin is nearing a key support level that could determine whether the current downtrend continues.

DOGE is trading just above its June 6 low near $0.0776, a level that now serves as a crucial line in the sand for bulls. 

A breakdown below this support could accelerate selling pressure and open the door to a deeper correction.

The meme coin also remains firmly below its 50-day Exponential Moving Average (EMA) at $0.0919 and its 200-day EMA at $0.1154, reinforcing the broader bearish trend.

Despite the prevailing weakness, one technical signal suggests a potential rebound may be forming.

The Relative Strength Index (RSI) currently sits around 30, keeping DOGE firmly in oversold territory.

More importantly, the RSI has formed a bullish divergence compared to its June 6 reading near 20.

This pattern often signals weakening selling pressure and can precede a short-term recovery.

However, traders should remain cautious, as bullish divergences do not always lead to immediate reversals.

Countering the optimistic RSI signal, the Moving Average Convergence Divergence (MACD) indicator remains bearish.

The MACD line continues to trend below its signal line, indicating that downside momentum remains dominant.

This suggests that any recovery attempt could be corrective rather than the start of a sustained bullish trend.

If the bearish trend persists, immediate support remains at the June 6 low of $0.0776. If this level fails to hold, DOGE could slide toward the next support zones near $0.0700 and $0.0641.

However, if the bulls regain control, they must first reclaim the descending trendline resistance around $0.0851.

A successful breakout could pave the way for a move toward the 50-day EMA at $0.0919, followed by the psychologically important $0.1000 level.

With retail demand fading and institutional participation remaining subdued, Dogecoin is approaching a critical juncture.

Whether bulls can defend support near $0.0776 may determine if the meme coin stages a relief rally or extends its multi-week decline.