Dogecoin (DOGE) Flash Crash Fears: Red Flags Prompt Spike in Short Positions

Key Takeaways

• Dogecoin’s funding rate has turned negative, suggesting traders are betting against the memecoin’s price.
• The NVT ratio spiked, implying that the speculative behavior around DOGE outweighs real network use.
• Most Short-term Dogecoin holders are at a loss, indicating weak hands dominate the market.
• DOGE’s price may revisit $0.10 unless renewed interest pushes the coin above resistance at $0.18.

It’s the fifth month of 2025, yet Dogecoin’s (DOGE) price is nowhere near $1 despite several calls for it after Donald Trump won the U.S. presidential election in November 2024.

As of this writing, Dogecoin’s price has plummeted 47.73% year-to-date, a drop that has triggered a shift in sentiment among traders. Once a retail favorite, the memecoin now faces growing skepticism.

In this analysis, CCN unpacks the factors behind the bearish outlook and what may lie ahead for DOGE’s price.

Traders Sound the Alarm on Dogecoin

Over the weekend, Dogecoin’s funding rate spiked. But as of this writing, the same metric has fallen to the negative region, with a rating of -0.001%.

Funding rate is the cost of holding an open position in the derivatives market. When positive, it implies that longs (buyers) are paying shorts (sellers) to keep their positions open — a sign of bullish bias in the market.

Since the funding rate is negative, it indicates that traders are predominantly short, and predicting that Dogecoin’s price might fall. From a trading perspective, the decline in the memecoin’s funding rate and price indicates that shorts are aggressive.

At the same time, they are being rewarded for their positions. If this trend continues, it could be bearish for Dogecoin’s price, indicating that the coin might struggle to recover.

Crucial Warning On-Chain

CCN’s findings suggest that one reason Dogecoin short positions are dominant is the spike in the Network Value to Transaction (NVT) signal. A high NVT signal indicates that the market cap is rising faster than the number of transactions on the network.

This is usually a bearish sign, indicating that the coin is in a speculative bubble state. On the other hand, a low NVT signal signifies that transaction volume has outpaced market cap growth, which is bullish.

According to Glassnode, the NVT ratio has risen to 95.58, suggesting that Dogecoin’s price will likely undergo another correction if transaction volume remains relatively low.

In line with this, the Short-Term Holder—Net Unrealized Profit/Loss (STH-NUPL) shows a drop into the capitulation (red) zone. The STH-NUPL quantifies whether short-term holders (those who acquired coins in the last ~155 days) are in profit or loss based on current prices.

This metric also gives an idea of investor behavior. High STH-NUPL means short-term holders are sitting on profits and could be a potential top signal.

On the other hand, deep negative STH-NUPL indicates capitulation zones, potentially indicating a bottom. But this negative rating only indicates a bottom if demand for the cryptocurrency rises.

But in the DOGE’s case, the STH-NUPL is at -0.64. Amid low interaction with the memecoin, Dogecoin’s price might struggle to rebound.

DOGE Price Analysis: Lower Lows

From a technical point of view, the daily chart shows that the Relative Strength Index (RSI) has dropped below the midpoint, indicating bearish momentum.

Like the RSI, the Money Flow Index (MFI) has also slid down the signal line. The drop in the MFI reading indicates fading buying pressure and the dominance of sellers.

If this trend continues, DOGE’s price is likely to drop below the support at $0.14 as it continues to trade below the falling trendline shown in the chart below.

If validated, Dogecoin’s next move might be a correction to $0.10, the level it last reached in October 2024. However, a surge in buying pressure could change things.

If that happens, the NVT Signal reading might drop, offering Dogecoin’s price a path to recovery. In that scenario, the memecoin could climb above the resistance at $0.18.

Should that be the case, DOGE might soar toward $0.24 near the 0.382 Fibonacci level.