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Highlights
- Dogecoin drops 7% ahead of the highly anticipated Rex-Osprey DOGE ETF debut.
- Large whale movements and profit-taking fueled today’s sharp decline.
- Analysts see the crash as a short-term pullback, with potential for ETF-driven liquidity to boost DOGE later.
Dogecoin (DOGE), the pioneering meme coin, has taken a hit as the crypto market crashed today. DOGE leads losses among the top 10 cryptocurrencies, trading at $0.2625 with a 7% drop. The rest of the meme coins have followed suit and experienced a drop of around 6% in their collective market cap. This is happening amid the highly anticipated launch of Rex-Osprey DOGE ETF on September 18. So, what’s causing the Dogecoin price crash, and could this affect the debut of the ETF?
Dogecoin Price: The Hype and the Fall
DOGE price skyrocketed by around 16% in a month, as the market showed its excitement over the Rex-Osprey DOGE ETF. Whales moved in quickly, accumulating over 280 million tokens. Futures open interest also increased to around $4.5 billion.
Traders and investors hoped DOGE’s performance would mirror Bitcoin, post-ETF launch. DOGE price prediction was made by some analysts, forecasting a possible value of $0.39 or even $1.
Top Reasons DOGE Price is Crashing
The price of DOGE has experienced a drop due to various reasons.
1. Liquidations of DOGE Tokens
On-chain data by Coinglass shows that Dogecoin experienced high liquidations in the past 24 hours. A total of around $26.28 million in positions were wiped out, with long positions reported the highest at about 21.81 million. The number of these liquidations is the key reason the Dogecoin price has declined sharply.
2. Broader Market Jitters
The crypto market is feeling tense ahead of the Federal Reserve’s policy meeting this week. A 25-basis-point Fed rate cut is expected, although there are no guarantees made. Any slow or no Fed rate cuts could affect the performance of digital assets like Dogecoin. Bitcoin prices and Ethereum slightly dropped in value, but are holding on relatively steady. Memecoins felt the heat and overreacted, with Dogecoin leading in a 7-9 drop.
3. ETF Structure Concerns
There are concerns surrounding the upcoming Rex-Osprey ETF. It comes with a 1.5% expense ratio and no leverage; it’s more expensive than simply owning DOGE. This may not appeal to investors and traders who favor higher yields. Some critics have even warned that trying to ‘institutionalize’ a meme coin with little real-world use could invite regulatory scrutiny.
Final Thoughts
Even with today’s Dogecoin price drop, some analysts view it as a normal pullback in an otherwise bullish trend. The ETF could still bring more liquidity and give DOGE some credibility, possibly sparking a rally similar to Bitcoin’s ETF-driven surge.
Frequently Asked Questions (FAQs)
1. Why is Dogecoin crashing today?
2. Will the Rex-Osprey DOGE ETF affect DOGE’s price
3. Is this price drop a sign of a long-term decline?
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