Dogecoin Crashes Below Key Support as $751M in Crypto Longs Wiped Out

Dogecoin sinks below $0.20 as crypto markets face heavy losses.
Over $751 million in long positions wiped out in hours.
Rising dollar and inflation fears trigger panic across digital assets.

Dogecoin's August woes continue as it plunges below crucial technical levels amidst widespread crypto market liquidations. The popular memecoin has shed over 9% in the last 24 hours, dipping to $0.201, and marking an 11% decline over the past week.

The broader cryptocurrency market is also feeling the pressure, with over $751 million in leveraged positions being liquidated. Data from CoinGlass indicates a staggering $706 million of that total came from long positions, suggesting traders were caught off guard by the rapid sell-off.

This sharp market correction follows a surge in the US dollar, with the DXY index climbing more than 3% in the last month. Increased dollar strength typically signals tightening financial conditions, prompting investors to reduce their exposure to riskier assets. Digital currencies like Dogecoin have been particularly affected by this shift in sentiment.

As Dogecoin breached its 200-day simple moving average at $0.212, market analysts are now closely watching the $0.20 level for potential support.

Adding to the uncertainty, inflation concerns have resurfaced following the release of the Federal Reserve's preferred inflation gauge. The core Personal Consumption Expenditures (PCE) index rose by 2.8% year-on-year, matching the previous month's level and marking the highest reading since February. The core inflation rate, excluding food and energy costs, edged up to 2.6% in June, a tenth of a percent higher than in May.

Traders Brace for More Losses as Dogecoin Tests Key Technical Levels

Dogecoin has now recorded five consecutive days of losses, steadily declining from a high of $0.248 on July 28. This latest downturn not only pushed the price below the 200-day SMA but also threatens the $0.20 support zone. Should this level fail to hold, the 50-day SMA at $0.194 could be the next significant support area where DOGE might find a rally.

Source: Tradingview

Diminishing expectations of rate cuts in September, as the FED maintains interest rates at 4.25%, have further eroded investor confidence, especially in the crypto space where liquidity is already dwindling.

Dogecoin's volatility has placed it firmly in the spotlight, as traders assess its next moves. A recovery above $0.212 could signal renewed momentum, but current market conditions suggest caution is warranted.

Dogecoin's break below a key support level underscores a general sense of unease in the cryptocurrency markets. With $751 million in long liquidations and persistent macroeconomic pressures, the outlook for digital assets remains uncertain.