Dogecoin drops as ETF inflows and NFP spark volatility

The Bureau of Labor Statistics (BLS) reported that US Nonfarm Payrolls increased by 50,000 in December, falling short of market expectations for a 60,000 rise. Concurrently, the Unemployment Rate saw a decline to 4.4%, below the 4.5% forecast. The BLS also revised November’s NFP figure downwards to 56,000 from an initial 64,000, noting that combined employment for October and November was 76,000 lower than previously reported. Following this macroeconomic news, the cryptocurrency market demonstrated heightened volatility, with Dogecoin recording an approximate 2% intraday loss to trade around $0.1143 on Friday. Bitcoin (BTC) was observed testing the $90,000 level, while Ethereum (ETH) maintained its position above $3,000 despite a slight dip.

• Intraday Loss (Dogecoin): ~2% (company claim)
• Dogecoin Price (Friday): ~$0.1143 (company claim)
• Futures Open Interest (OI) peak: $1.96 billion (Tuesday) (company claim)
• Futures Open Interest (OI) current: $1.82 billion (Friday) (company claim)
• Dogecoin Spot ETF Inflow (Thursday): ~$334,000 (company claim)
• Largest Dogecoin ETF Inflow (since launch): $2.3 million (January 2) (company claim)

The recent NFP report highlights the sensitivity of the cryptocurrency market, including meme coins like Dogecoin, to traditional economic indicators. Weaker-than-expected job growth can signal broader economic uncertainty, leading investors to reduce their exposure to riskier assets. While Dogecoin’s derivatives market, as indicated by CoinGlass data, saw a brief surge in futures Open Interest to $1.96 billion earlier in the week, it has since narrowed to $1.82 billion, suggesting a cooling in speculative interest. Despite this, Dogecoin spot ETFs recorded minor inflows, with SoSoValue data indicating a notable $2.3 million inflow on January 2, the largest since their launch. This suggests a nascent institutional or broader investor interest, though it currently appears insufficient to counteract prevailing macroeconomic pressures. Dogecoin, while a popular cryptocurrency, often reflects broader market sentiment, and its price action is also influenced by its position within the wider digital asset ecosystem. Dogecoin.com provides further information on the project.

Analysts suggest that if the downward trend in derivatives Open Interest persists, signaling reduced retail demand, Dogecoin’s price recovery could face significant challenges. The cryptocurrency currently faces immediate resistance from its 50-day Exponential Moving Average (EMA) at $0.1436, with the 100-day EMA at $0.1608 and the 200-day EMA at $0.1791 reinforcing a broader bearish sentiment. While the Moving Average Convergence Divergence (MACD) indicator remains in positive territory, its contracting histogram suggests a weakening bullish momentum. A sustained defense of the $0.1276 support level, which previously acted as a descending trend line from $0.3063, will be crucial for any potential recovery. Investors will likely be watching for a decisive push above these key moving averages and sustained inflows into ETF products to gauge the likelihood of a turnaround. Further economic data from the Bureau of Labor Statistics and overall crypto market sentiment will continue to play a critical role in Dogecoin’s near-term trajectory.