The price of Dogecoin (DOGE) may soon welcome a bullish reversal, as technical indicators and market sentiment suggest it has upward potential. Despite currently facing some downward pressure, analysts point out that Dogecoin has steadily held the key support level of $0.385. If it breaks the resistance level of $0.42, it could trigger a new bull market.
Moreover, due to the negative market sentiment, the liquidation of shorts may also present an opportunity for Dogecoin to rise. Some analysts believe that market dynamics may stimulate positive trends for Dogecoin. The current trading price of Dogecoin is $0.3843.
From a technical and market sentiment perspective, Dogecoin's price appears ready for a significant bullish reversal. Despite facing some recent downward pressure, several factors indicate that Dogecoin may rise again.
1 Dogecoin Rebounds at Key Support Level (1-hour Chart)
Cryptocurrency analyst CRG (@MacroCRG) notes that both Dogecoin and another popular meme coin PEPE are showing strong resilience. He stated: "DOGE and PEPE are rebounding at important positions, and I believe the decline of meme coins has been exaggerated. The upcoming trends will surprise many people."
CRG's technical analysis shows that despite significant selling pressure in the market, DOGE has remained above the key support level of $0.385 for nine consecutive days, indicating a certain level of resilience. Meanwhile, PEPE has also stabilized its support, suggesting that the 'meme coin season' may see a new active phase.
For Dogecoin, $0.42 is a key short-term resistance level. CRG believes that once this level is broken, it could trigger a new wave of increases that will catch many investors off guard.
2 Bullish Market Structure (4-hour Chart)
Further technical analysis comes from analyst Gonzo (@GonzoXBT), who explained that Dogecoin's 4-hour chart shows the 100-period EMA (Exponential Moving Average) acting as resistance, while the 200-period EMA acts as support. Gonzo stated: "Before breaking the 4-hour EMA100, the price may oscillate between these two EMAs, but if it falls below the 4-hour EMA200, it could trigger greater downside risk."
This analysis emphasizes the important role of the 4-hour Exponential Moving Average (EMA) in predicting short-term price movements. Currently, the 4H EMA100 serves as resistance, while the 4H EMA200 provides support. If Dogecoin can consistently break above the 4-hour EMA100, it may push the price upward; conversely, if the price fails to hold above the 4-hour EMA200, it may lead to more consolidation or downside pressure.
3 Counter-Trend Trading
Cryptocurrency analyst Ali Martinez (@ali_charts) takes a different perspective on Dogecoin's prospects, presenting a bullish view. He stated: "The market sentiment for Dogecoin has turned negative. During this prolonged price consolidation period, traders seem to be getting impatient."
According to Martinez's data analysis based on Santiment, Dogecoin's search volume and sentiment index have significantly decreased. Specifically, the weighted sentiment has dropped to its lowest point since mid-October, while the search volume has fallen to its lowest level since early November.
Martinez also proposed several potential catalysts that could quickly ignite positive momentum for Dogecoin. He mentioned that the new 'Department of Efficiency' under Elon Musk's leadership could be an important factor driving Dogecoin's rise. He suggested, "You can also wait and see what the first major action of the Department of Efficiency will be."
4 Liquidation Dynamics Indicate Potential Upside
Cryptocurrency analyst Carlos Garcia Tapia (@CAGThe3rd) recently shared an analysis of the liquidation heat map from the past three days, further supporting the bullish view on Dogecoin. He commented: "FOMO long positions were just liquidated on the 3D candlestick chart, which may impact Dogecoin's price movement."
According to Coinglass's heat map, a large number of leveraged long positions were liquidated in the $0.393 to $0.385 range over the past two days, indicating some downward pressure. However, it is noteworthy that since most longs have been liquidated, the remaining liquidation cluster is concentrated around the $0.42 mark, providing potential space for further upside.
This setup indicates that Dogecoin may form a bullish candlestick pattern, potentially triggering forced liquidations of more bearish positions, driving the price upward. This is because the liquidation heat map is an important tool for predicting price movements, reflecting the market's potential liquidity and leverage dynamics.
The heat map can highlight price ranges that are most susceptible to forced liquidation, creating key psychological and technical barriers. When prices approach these areas, large market participants may influence price direction by triggering a wave of liquidations, amplifying market price volatility.
Currently, the trading price of Dogecoin is $0.3843.
