Dogecoin (DOGE) is showing strong signs of a potential recovery following a period of short-term weakness, with both technical and on-chain indicators suggesting a short-term momentum shift.
Notably, pseudonymous analyst Trader Tardigrade has identified an approaching bullish MACD crossover on the four-hour chart, a technical signal that suggests the cryptocurrency may be preparing for a recovery.
This has sparked interest among traders, with many closely monitoring for confirmation of a potential upward trend in the near term.
Technical analysis signals a bullish shift
From a technical perspective, the MACD indicator is signaling a bullish crossover, indicating a shift in momentum from bearish to bullish, often viewed as a precursor to price rallies.
The price action has also reflected this shift, as DOGE has rebounded from lows near $0.29 to trade around $0.34 at the press time, suggesting that the cryptocurrency is gaining upward traction.
DOGE price analysis chart. Source: TraderTardigrade/X
Adding to the bullish sentiment, crypto market analyst Ali Martinez noted in a recent post on X that Dogecoin whales accumulated 460 million tokens during the recent market dip. This significant activity highlights a ‘buy-the-dip’ strategy among large-scale investors, suggesting further gains for the cryptocurrency.
For traders and investors, these indicators suggest a promising short-term outlook, with DOGE likely to test key resistance levels at $0.35 and $0.37. A break above critical resistance near $0.41 could trigger a parabolic rally, mirroring previous bull runs.
Derivative data indicates a shift in momentum for DOGE
Market derivatives data further supports the case for a short-term momentum shift. Open interest has risen by 0.20%, while options open interest has surged 33.11%, signaling growing market participation and bullish positioning.
DOGE Derivatives data. Source: CoinGlass
Moreover, $2.56 million in short liquidations highlights the pressure on bearish traders, increasing the likelihood of a short squeeze that could amplify upward momentum. Although trading volume has declined, this may signal the end of a consolidation phase, creating favorable conditions for a breakout.
DOGE price analysis chart
As of press time, DOGE is trading at $0.33, reflecting a 1.9% gain over the past 24 hours. However, the meme coin remains down 13% on the weekly chart.
DOGE one-day price chart. Source: Finbold
With bullish technical patterns, significant whale accumulation, and strengthening derivatives’ data, DOGE appears positioned for a potential rebound.
Market participants should closely monitor key resistance levels and overall market sentiment to gauge whether the cryptocurrency can maintain its upward momentum in the near term.