Dogecoin (DOGE) experienced a sharp 5% decline on Tuesday, January 21, 2026, falling from $0.128 to $0.125 and breaking below a critical support level at $0.126. The move triggered significant long liquidations in derivatives markets, accelerating the sell-off as forced exits added downward pressure. The failure of the $0.126 support, which had been tested three times, occurred during high-volume trading, turning the previous support zone between $0.126 and $0.127 into a new resistance area.
The sell-off was not linked to specific news but was driven by positioning and liquidation cascades, reflecting broader crypto market weakness. Data from Arkham revealed substantial DOGE inflows to exchanges, totaling $702 million on January 17 and 20, historically a precursor to selling pressure. Concurrently, ETF outflows for Dogecoin amounted to 406.96K on January 20, signaling a shift in investor sentiment and potential preparation for a deeper correction.
Technically, the breakdown confirmed a bearish shift, with DOGE languishing below past support. Traders identified $0.124 as a near-term critical level; a failure to hold could lead to further declines toward $0.122-$0.123, with a steeper drop to $0.08 possible if bearish momentum continues. The MACD indicator showed bearish signs, and with increasing inflows to exchanges and ETF outflows, Dogecoin faces a critical juncture where buyer defense is essential to prevent further losses.
