Dogecoin (DOGE) has seen a 7% increase over the past few days, followed by a slight retracement. The recent price surge facilitated a breakout from a bullish pattern, positioning DOGE for a potential 17% gain. However, this rally is contingent upon breaking a crucial resistance level. Despite the bullish price action, overall market sentiment remains bearish, with increased exchange inflows and growing short positions indicating that traders may be preparing to push the Dogecoin price lower. The question remains: Can DOGE withstand the potential downturn?
Dogecoin Defies Bearish Market Sentiment
DOGE has seen a slight decline of 1.2% in the last 24 hours, trading at $0.1039. This small dip contrasts with the increasing bearish sentiment surrounding the meme coin.
Elon Musk inadvertently drew attention to Dogecoin with a recent post about accepting a fictional Cabinet office offer abbreviated as D.O.G.E. Additionally, Musk rekindled his feud with UK Justice Minister Keir Starmer by referring to the country as a âpolice state.â
On Tuesday, Dogecoin experienced a net exchange flow of $4.43 million, the largest since July 20, 2024. This significant inflow suggests that some traders may be planning to push DOGEâs price lower. Data from Coinglass indicates that Dogecoinâs open interest (OI) increased while the price dropped over the last 24 hours. This typically signals that traders are entering short positions, which is bearish for the price. Moreover, the Coinglass Liquidation Map shows a higher cumulative short liquidation leverage compared to longs, further indicating that traders are betting on a price decline.
Despite this negative sentiment, Dogecoinâs price prediction suggests that the asset could still see a 17% jump in the coming days.
Technical Analysis: Key Resistance at $0.1085
Dogecoin's price chart recently broke out of a falling wedge pattern that had been forming since early August, signaling potential bullish momentum. The latest candlestick pattern shows a strong upward move out of the triangle, a bullish signal often seen after a period of consolidation.
DOGE may encounter resistance around $0.1059, a level that aligns with the upper Bollinger Band. Should the price break through this resistance, it could climb to $0.1274, representing a potential 17% increase.
The price is currently near the upper band of the Bollinger Bands, indicating strong momentum. Staying near or above this band could suggest continued bullish pressure. Additionally, the bands are contracting, which usually precedes a significant directional move.
The Coppock Curve, a momentum indicator, is positive at 3.02571, indicating upward momentum and further supporting a bullish outlook.
If Dogecoin maintains support above $0.0995, it remains a solid long-term bet. Should the broader market conditions remain favorable, the next major target beyond $0.1274 could be the $0.1500 level.
However, if DOGE price falls back into the triangle, it could signal market weakness, potentially leading to a decline to $0.0985 and $0.0800. The coming days will be crucial in determining whether Dogecoin can break through its resistance and continue its upward trajectory.
Notice:
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