Dogecoin plummets as a wave of selling from retail investors increases

Dogecoin (DOGE) is hovering around the key support level of $0.1000 at the time of writing on Thursday, amid widespread selling pressure across the cryptocurrency market. This leading meme coin has yet to recover from its weakness, as risk-averse sentiment prevails, retail investor liquidity declines, and technical signals continue to send negative warnings.

Dogecoin extends selling trend amid retail investor withdrawals and weakening sentiment

Dogecoin is under clear pressure from the weakening of the derivatives market, as open interest (OI) in futures contracts dropped to $1.16 billion on Thursday, significantly lower than the $1.27 billion recorded the previous day.

This development contrasts sharply with the peak on September 14, when Dogecoin futures OI surged to a record $6 billion. The large gap between these two points indicates a strong cooling of speculative capital, reflecting widespread cautiousness in the market.

The continuous shrinking of OI increases selling pressure, suggesting traders are more inclined to close positions rather than open new ones. Conversely, if OI recovers early and expands again, Dogecoin could find new upward momentum as market sentiment gradually improves.

Unpaid DOGE futures contract volume | Source: CoinGlass Meanwhile, the sentiment index from Alternative also signals negativity, dropping from 14 to 12, reflecting extreme fear dominating the cryptocurrency market. Investors remain cautious amid the prolonged sell-off, leading to a decreasing number of new positions opened daily. However, historically, periods of extreme fear often present attractive buying opportunities, as strong recoveries frequently follow deep corrections.

Crypto Fear & Greed Index | Source: Alternative

Technical outlook: Dogecoin faces increasing downside risk

Dogecoin is gradually approaching the critical support zone of $0.1000, with exponential moving averages (EMAs) indicating a prevailing downtrend. Specifically, the 50-day EMA at $0.1295, the 100-day EMA at $0.1457, and the 200-day EMA at $0.1677 are stacked, forming a “dynamic resistance zone” that reinforces the prolonged bearish outlook for DOGE.

The RSI indicator has returned to oversold territory, reflecting rising selling pressure and strengthening downward momentum. If this trend continues, the meme coin is likely to remain under bearish control.

Daily DOGE/USDT chart | Source: TradingView Additionally, the MACD line remains below the signal line, while red histogram bars continue to expand, further confirming the negative signal and encouraging selling pressure on DOGE.

However, in a more optimistic scenario, narrowing MACD histogram bars could be an early sign that the downward momentum is weakening and a potential reversal is forming. If Dogecoin maintains the support zone of $0.1000 and successfully breaks above the 50-day EMA at $0.1295, and crosses the downtrend line, the market trend could shift from bearish to bullish.