Despite the recent success of other meme coins like PEPE Coin and Dogfi, Dogecoin (DOGE), the largest meme coin, has failed to keep up, experiencing a 4% price drop in the last 24 hours to below $0.16. This downward trend in the broader meme coin sector has sparked curiosity among investors and analysts alike, leading to a thorough examination of the factors contributing to Dogecoin's underperformance.

Market analyst Ali Martinez has been closely tracking Dogecoin's price fluctuations and identifies a crucial resistance zone between $0.166 and $0.171. If the bulls can successfully breach this level, the meme coin's value could potentially double, with the next resistance level set at $0.322. However, in contrast to the rally seen in PEPE coin and WIF, Dogecoin has witnessed a decline in demand over the past week.

Data from IntoTheBlock reveals a significant 18% drop in the daily number of addresses completing transactions involving DOGE over the past seven days. Moreover, new demand for the meme coin has also plummeted, with a 21% decrease in the number of new addresses created to trade DOGE during the same period. This decline in daily active addresses and new addresses indicates a decrease in overall trading volume. According to Santiment's data, DOGE's daily trading volume peaked at $3.01 billion on May 24 and has since dropped by 53%.

On the other hand, a cryptocurrency trader recently purchased 2 million Dogecoin (DOGE) call options with a strike price of $0.22, expiring on June 14. For this investment to be profitable, the popular meme coin would need to surge by an additional 31% from its current levels. This move follows a bullish day in the meme coin sector, driven by a sudden increase in Gamestop's (GME) share price. Dogecoin reached a local high of $0.22 in March 2024 but has failed to exceed that level since then.

The underwhelming performance of Dogecoin can be attributed to various factors. Short-term traders, who buy DOGE at favorable prices and sell when necessary, contribute to the currency's price declines and fluctuations. The ongoing regulation war between the United States Securities and Exchange Commission (SEC) and major exchange firms like Binance and Coinbase has also impacted Dogecoin's market value. Furthermore, the crypto market is often driven by the actions of top coins, and Dogecoin, as a derivative of Bitcoin, is affected by Bitcoin's actions.

Despite the current bearish trend, Dogecoin's future potential remains promising. The meme coin boasts a strong community, high liquidity, and affordability, making it an attractive option for new investors. Its inflationary model encourages spending and active use as a currency, which may contribute to its long-term survival. Dogecoin has also been integrated into various services and platforms, highlighting its potential as a valuable digital currency.

In conclusion, Dogecoin's underperformance in the recent meme coin surge can be attributed to a combination of factors, including a decline in demand, decreased trading volume, and the ongoing regulation war. However, the meme coin's strong community, liquidity, and affordability, along with its potential for increased adoption, suggest that it may still have a bright future ahead. As the crypto market continues to fluctuate, investors and analysts will be closely monitoring Dogecoin's price movements, searching for signs of a potential turnaround.