Dogecoin faces potential downside risk as analysts warn of weak technical support levels. Analysts suggest the meme coin could drop 42% if current price floors fail. The warning comes despite rising futures activity that signals trader interest in the token's next move.
What Happened: Support Warnings
Dogecoin traded flat Sunday with less than 1% gains over 24 hours. Trading volume surged 95% to $1.16 billion for the dog-themed cryptocurrency.
The token lagged Bitcoin and Ethereum, which gained 1.90% and 2.64% respectively. Open interest for DOGE futures climbed 1.27% in the same period, according to Coinglass data.
Cryptocurrency analyst Ali Martinez warned on social media that Dogecoin has "weak support under current levels." He identified the next major support zone near $0.081—a 42% decline from current prices.
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Why It Matters: Technical Signals
The diverging technical indicators create uncertainty for traders. Trader Tardigrade, another market analyst, identified a symmetrical triangle pattern on Dogecoin's 12-hour chart that could signal a bullish reversal.
The Moving Average Convergence Divergence indicator showed a "Buy" signal for DOGE, according to TradingView. The Awesome Oscillator displayed a conflicting "Sell" reading. Rising open interest amid flat prices suggests traders are positioning for significant price movement in either direction.
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