Dogecoin Drops to $0.1275 as Trade Tensions Trigger Market Liquidations

The Dogecoin price slumped with a sharp flash crash, erasing all gains made earlier this year to $0.1275, down 18% from its year-to-date high.

This sudden downturn was driven by growing concerns over a potential new trade war between the United States and NATO countries, including Germany, the United Kingdom, Sweden, and Norway. The crash triggered a surge in bullish liquidations, marking the highest levels since November.

Liquidations occur when exchanges forcefully close leveraged positions after losses exhaust collateral, compounding downward pressure on prices. Despite the decline, some catalysts could prompt a Dogecoin rebound in the coming days.

One key event is the upcoming Supreme Court of the United States (SCOTUS) ruling on Donald Trump’s tariffs, expected this week. The decision could invalidate the tariffs imposed on NATO countries, potentially resulting in refunds to affected businesses.

Data from Polymarket suggests that most market participants anticipate a ruling against Trump’s tariffs. Such an outcome could provide a temporary boost to Dogecoin and other affected assets. However, this relief may be short-lived, as Trump could pursue alternative tariff measures, including invoking Section 301 on unfair trade practices, Section 232 on national security grounds, or seeking Congressional approval for new tariffs.

Dogecoin Eyes Recovery After Breaking Falling Trend

Dogecoin (DOGE) is showing early signs that its long downtrend may be coming to an end. On the daily chart, the price has been moving inside a falling channel since October, making lower highs and lower lows. This confirmed strong bearish pressure for several months.

Recently, DOGE tried to break above this downward trendline. The price briefly moved higher, which is often seen as a possible breakout. At the moment, DOGE is trading around $0.129. This move suggests that sellers are losing strength and buyers are slowly returning to the market.

There is an important support zone near $0.12. This level has held in the past and is now helping to stop further price drops. If DOGE stays above this area, it increases the chances of a short-term recovery.

DOGEUSDT Analysis Source. Tradingview

However, the price still faces strong resistance ahead. The first major resistance is between $0.18 and $0.20. Another higher resistance sits around $0.28 to $0.30. These are areas where many traders previously sold, so DOGE will need strong buying pressure to move past them.

Dogecoin Could Be Near a Trend Reversal

The Relative Strength Index (RSI) is now around the middle level. This means DOGE is no longer oversold, but it is also not strongly bullish yet. A move above the 50 mark would be a better sign that momentum is shifting in favor of buyers.

In the past, Dogecoin has made fast rebounds after long periods of sideways or falling prices. This is why some traders believe a bullish reversal could be forming now.

Still, confirmation is needed. DOGE must hold above the broken trendline and start making higher highs. If the price fails to stay above this area, it could fall back toward the $0.12 support.

For now, Dogecoin is at a key turning point, and the next few days will be important for its short-term direction.