Dogecoin (DOGE) has experienced a sharp decline in its futures trading volume, dropping significantly from $58.2 billion in November 2024 to just $992 million in February 2025. This dramatic reduction in trading volume highlights a cooling of investor interest and market speculation, potentially signaling a bearish outlook for the altcoin. Despite this, price action indicates potential bullish signals, leaving traders and investors wondering whether a recovery is imminent.

Declining Futures Trading Volume

The sharp drop in Dogecoin’s futures trading volume has been one of the most noticeable trends over the past few months. In November 2024, the market saw a significant spike in trading activity, with DOGE futures reaching a peak of $58.2 billion. This surge in volume coincided with DOGE’s price reaching $0.308, reflecting heightened market speculation and trading frenzy. However, the enthusiasm was short-lived.

As the weeks progressed, the trading volume began to gradually decrease, and by the start of 2025, daily futures volumes had consistently dropped below $5 billion. This sustained decline suggests that speculative interest in Dogecoin has waned, possibly due to broader market conditions or diminishing returns on speculative trades. If this trend continues, the downward pressure on DOGE’s price could intensify. On the other hand, if trading volume starts to increase again, it could signal renewed interest and lead to a price rebound.

Decline in Network Activity

Along with the drop in futures trading volume, Dogecoin’s network activity has also seen a significant decline. The creation of new addresses, a key indicator of network usage and interest, has fallen drastically. In November 2024, nearly 1.29 million new addresses were created, signaling a strong interest in the network and a correlation with higher DOGE prices. However, this figure has since dropped to just 30,815 new addresses, indicating a sharp slowdown in network engagement and a decline in the overall interest in the cryptocurrency.

This decrease in network activity parallels the fall in DOGE’s price, which has dropped accordingly. As new address creation slows down, the demand for DOGE diminishes, contributing to its bearish price action. However, despite these signs of weak market sentiment, there is a glimmer of hope for Dogecoin, as technical indicators show a potential turning point.

Technical Indicators Point to a Possible Rebound

Despite the downtrend in trading volume and network activity, the TD Sequential indicator has recently flashed a buy signal for DOGE. This signal suggests that the current downtrend might be coming to an end, indicating a potential reversal and setting the stage for a price recovery. As of now, DOGE is stabilizing around $0.21267, which could be an important level of support.

Historically, such buy signals have often preceded price increases, especially when supported by favorable market sentiment. If buyers regain control and bullish momentum picks up, DOGE could see its price rise once again. A break above the current support level could push DOGE toward higher resistances and possibly revisit previous price levels.

Outlook and Potential Risks

The outlook for Dogecoin remains uncertain, with a few key factors determining its future trajectory. If DOGE can maintain support above $0.21267 and continue stabilizing, the buy signal could lead to a price recovery. However, if market sentiment fails to turn positive and DOGE loses its support level, it could experience further declines, testing lower price boundaries.

The key to Dogecoin’s recovery lies in the return of speculative interest, which could drive volume and network activity back to more favorable levels. Without this, the current bearish trend may persist, keeping DOGE under pressure. Traders and investors should remain vigilant as the altcoin navigates through this uncertain period.