After a steep 20% price decline over four days, Dogecoin ($DOGE ) seems to have found a critical support level around $0.32. The cryptocurrency's stability at this level is fueling optimism among traders, especially as rumors circulate that Elon Musk might be considering buying Liverpool FC.

Market Sentiment and Price Action

The DOGE derivative market remains active, with Open Interest holding firm at $3.4 billion despite significant crypto market liquidations of $500 million on Wednesday. This resilience signals strong investor confidence in a potential recovery for Dogecoin.

Key Observations:

1. Price Resilience: $DOGE managed to hold the $0.32 support level, avoiding a dip below the 200-day DMA at $0.284, a critical zone for long-term investors.

2. Shrinking Volume Delta: A reduction of $271 million in Volume Delta suggests that selling pressure has decreased, opening the door for a bullish comeback.

3. Potential Short Squeeze: Active leveraged traders may drive a short squeeze if bullish momentum builds, potentially propelling DOGE beyond $0.40.

Musk’s Influence on Dogecoin

Elon Musk has a well-documented history of impacting Dogecoin's price with his tweets and business ventures. The rumor of his potential Liverpool FC acquisition has already stirred positive market sentiment, with many speculating that it could reignite interest in $DOGE .

Next Price Targets

If Dogecoin successfully breaks above the 50-day DMA at $0.378, it could test the $0.40 resistance. A sustained rally might even pave the way for DOGE to revisit $0.50 in the medium term.

Technical Levels to Watch:

Support: $0.32, followed by $0.284 (200-day DMA).

Resistance: $0.378 (50-day DMA), with the next target at $0.40.

Conclusion

The combination of strong support at $0.32, decreasing selling pressure, and heightened market sentiment surrounding Elon Musk’s rumored activities creates a favorable setup for Dogecoin. While caution is advised in volatile markets, DOGE’s durability indicates that it might be gearing up for a significant rebound.

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