Dogecoin may finish the year with losses for the first time in three years

Dogecoin’s performance in the final months of 2025 has taken a hit, with a significant 26% decline. This marks a departure from the coin’s usual trend of growth during the last quarter of the year, where it showed positive returns of +14% in 2022, +44% in 2023, and a whopping +176% in 2024. The current scenario is worrisome, as major holders are reducing their positions, and trading volumes are on the decline.

Recent on-chain analytics data reveals a sharp decrease in the share of long-term investors in Dogecoin. While holders who maintained the coin for one to two years controlled over 40% of the supply back in July, that number has plummeted to around 22% currently. On the other hand, short-term investors seem to be losing interest, indicating a lack of speculative activity in the market.

Activity among large wallets has noticeably dwindled as well. Holders of 10 to 100 million Dogecoin have reduced their balances by more than 4 billion coins since October, amounting to roughly $730 million at the current rate of $0.17. In contrast, medium players holding between 100 million to 1 billion Dogecoin are increasing their holdings by 17% over the past month.

The lack of alignment between large and medium holders is creating instability in the market. Without coordinated buying from larger wallets, upward price movement becomes challenging. Despite positive expectations surrounding a potential Dogecoin ETF, the current quarter appears to be weaker than any seen since 2020.

Adding to the pressure are declining trading volumes and derivatives activity. The On-Balance Volume (OBV) indicator has breached the long-term support line for the first time this year, indicating a lack of genuine demand driving the current rebounds. Imbalances in futures positions, with short positions outnumbering longs significantly, further demonstrate the dominance of sellers and expectations of further decline.

However, the concentration of short positions could trigger a short squeeze if the price experiences even a modest increase, forcing some traders to close positions and potentially causing a brief spike in value. Dogecoin is currently hovering within an ascending channel on the weekly chart, with crucial support around $0.17 determining the course of the medium-term trend. A break below this level could lead to further support at $0.15, marking the first complete breach of the structure in seven months.

Despite the prevailing weakness, there is still a glimmer of hope for a short-term rebound. The RSI index points to a hidden bullish divergence, suggesting the possibility of an upward correction. Maintaining a position above $0.17 and with the RSI signal manifesting, there could be a growth potential of about 30%, targeting $0.22 – coinciding with the 0.5 Fibonacci retracement level. Additionally, the launch of a spot ETF from Bitwise, rumored to be approved by the end of November, could catalyze a short-term surge of interest in Dogecoin and help it finish 2025 without significant losses.

The overarching scenario hinges on the coin holding above $0.17. Preserving this support could see Dogecoin stabilize and attempt to regain its position in 2026. Conversely, a breach of this level could pave the way for a drop to $0.15 and below, posing a threat to the multi-year uptrend.