This article is available in Spanish.
The price of Dogecoin (DOGE) appears poised for a significant bullish reversal, supported by technical indicators and market sentiment data. Despite the recent downward pressure, several factors suggest a potential upward trajectory for the popular memecoin.
#1 Dogecoin bounces off key support level (1D chart)
Crypto analyst CRG (@MacroCRG) highlighted the resilience of Dogecoin and PEPE, another prominent memecoin, saying: “DOGE + PEPE are both bouncing out of key areas. The demise of memecoin is greatly exaggerated IMO. The next stage will surprise many.”
CRG’s technical analysis shows that DOGE has maintained a daily close above the critical support level at $0.385 for nine consecutive days despite significant selling pressure. Likewise, PEPE has received crucial support, indicating that ‘memecoin season’ could soon make a comeback.
Related reading
For Dogecoin, the short-term resistance zone at $0.42 remains a crucial level. CRG suggests that a break above this threshold could signal the start of a new bull run, potentially catching many investors off guard.
#2 Bullish Market Structure (4-Hour Chart)
Further technical insight comes from crypto analyst Gonzo (@GonzoXBT), who provided a technical overview of Dogecoin’s price action. Gonzo explained: “DOGE 4H EMA100 -> acts as resistance 4H EMA200 -> acts as support. Until we turn around the 4H EMA100 we will just cut through it, we don’t want it to lose the 4H EMA200.”
This analysis highlights the importance of the 4-hour exponential moving averages (EMAs) in determining short-term price movements. The 4H EMA100 currently serves as a resistance level, while the 4H EMA200 provides support. A sustained break above the 4H EMA100 could facilitate an upside breakout, while the inability to hold above the 4H EMA200 could lead to further consolidation or decline.
#3 Act against the crowd
Crypto analyst Ali Martinez (@ali_charts) once again presented a bullish perspective on DOGE’s immediate prospects. He noted: “Market sentiment for Dogecoin has turned negative. It seems like traders are getting impatient during the ongoing price consolidation!”
Related reading
Martinez’s analysis, based on Santiment data, indicates a sharp decline in both search volume and weighted sentiment. Specifically, weighted sentiment has fallen to its lowest point since mid-October, while search volume has fallen to levels not seen since early November.
Martinez speculated on potential catalysts that could quickly revive positive momentum for Dogecoin, pointing to the creation of the new US government Department of Efficiency led by Elon Musk. He suggested, “Or you could wait for the first POPULAR move from the government’s Ministry of Efficiency.”
#4 Liquidation dynamics indicate potential upside
Crypto analyst Carlos Garcia Tapia (@CAGThe3rd) adds another layer to the bullish thesis. shared insights into the liquidation heatmap over the past three days, noting: “FOMO Longs just liquidated on the 3D chart. DOGE.”
Coinglass’ heatmap illustrates significant liquidation of leveraged long positions clustered between $0.393 and $0.385 over the past two days. But there is a bullish caveat: With the majority of long positions liquidated, the remaining liquidation cluster is around $0.42.
This setup suggests that Dogecoin could experience a bullish candle formation, which could potentially trigger further liquidations of bearish positions and push the price higher. Why? Because liquidation heatmaps are valuable tools in predicting price movements because they reflect underlying market liquidity and leverage.
These heatmaps show where traders are most susceptible to forced liquidations, acting as psychological and technical barriers. When the price approaches this level, large market participants can influence the price direction by triggering a cascade of liquidations, amplifying the resulting price movement.
At the time of writing, DOGE was trading at $0.3843.
Featured image created with DALL.E, chart from TradingView.com
Credit : www.newsbtc.com
