Dogecoin Rally To $0.35 Could Cause Massive Short Squeeze
Dogecoin (DOGE) may be about to undergo a major price shift that might spark a short squeeze, according to analyst. On January 27, he said on X that “$766.45 million in short positions will be liquidated if Dogecoin DOGE rebounds to $0.35,” suggesting pessimistic traders are on thin ice.
Huge Dogecoin Short Squeeze?
The latest Coinglass liquidation heatmap indicates large short holdings between $0.339755 and $0.34368. Coinglass data reveals $464.8 million at $0.339755, $534.79 million at $0.34054, $503.97 million at $0.341325, $433.04 million at $0.34211, and $325.29 million at $0.34368, totaling $2.26 billion in probable forced liquidations.
If DOGE rises over that narrow range, that figure shows the potential short squeeze. Coinglass says its heatmap “predicts where liquidation levels are likely to initiate,” and “liquidations play a crucial role in the cryptocurrency market” because they can cause rapid price swings when traders with large leveraged positions close out.
Since Dogecoin temporarily rose to $0.4834 on December 8, the price has fallen. DOGE crossed above this level on January 15, 2025, signaling a positive move, but market turmoil on January 26 sent it back below.
Thus, the falling line, at $0.335 to $0.34, is a severe obstacle. Given the concentration of shorts Coinglass has seen above that zone, a breach might be crucial. If DOGE rallies sufficiently to break that level, short traders may cover fast, sending buying pressure that may drive an upward rise.
DOGE is above the 0.382 Fibonacci retracement around $0.313, which stopped the last market sell-off. Traders will monitor for momentum weakness approaching $0.212 (0.236 Fibonacci retracement), the next key support.
The 0.5 retracement at $0.394 remains a significant upward pivot. If Dogecoin can rebound above that mark, resistance may form again around 0.476 to 0.592.
