Dogecoin (DOGE) Price Drops 4% Amid Meme Coin Slump, What’s Behind The Underperformance?

While the rest of meme coins within the sector such as PEPE Coin and Dogfiwhat have delivered massive gains in the past few weeks, the largest meme coin Dogecoin (DOGE) has been an underperformer. In the last 24 hours, the DOGE price has dropped by another 4% under $0.16 amid the slump in the broader meme coin sector.

What’s Behind the Dogecoin Underperformance?

Market analyst Ali Martinez has been closely monitoring Dogecoin’s price movements. He highlights a critical resistance zone for DOGE between $0.166 and $0.171. If DOGE bulls can break through this level, the meme coin could potentially double in value, targeting the next resistance around $0.322.

On the other hand, while PEPE coin and WIF have been rallying, the demand for Dogecoin (DOGE) has dropped in the last week. According to data from IntoTheBlock, the daily number of addresses completing transactions involving DOGE has plummeted by 18% over the past seven days. Additionally, new demand for the meme coin has also decreased, with the number of new addresses created to trade DOGE dropping by 21% during the same period.

A decline in an asset’s daily active addresses and new addresses suggests a decrease in overall trading volume. According to Santiment’s data, DOGE’s daily trading volume peaked at $3.01 billion on May 24 and has since dropped by 53%.

Trade Buys 2 Million DOGE Call Options

On Wednesday, May 29, a cryptocurrency trader bought 2 million Dogecoin (DOGE) call options with a strike price of $0.22. These call options expire the next month on June 14 meaning that the popular meme coin will have to surge another 31% from the current levels in order to be profitable.

The trade follows a bullish day in the meme coin sector, spurred by a sudden increase in Gamestop’s (GME) share price. Dogecoin reached a local high of $0.22 on March 2024 but has not exceeded that level since then. Bernd Sischka, chief commercial officer at derivatives exchange PowerTrade. said:

“I think altcoins have been lagging the recent run-up in ethereum and for most traders look at what ETH is doing and imply potential moves for altcoins. The ETF apporval drove the ETH rally but I think with doge the wild card is that Elon Musk adds it to Twitter as some sort of payment currency.”