Dogecoin (DOGE) has attracted attention as traders monitor the potential for a breakout to higher price levels at this time. After several months of accumulation, DOGE is trading above key moving averages (MAs) and breaking past a major resistance trendline.
Liquidation data shows that leverage has decreased, allowing for increased volatility. With historical patterns previously showing strong rallies after similar setups, many are watching to see if DOGE can soon reach $0.65 and beyond.
Technical indicators signal strong bullish momentum.
DOGE shows distinct bullish patterns across multiple timeframes as the price trades above the 5-day, 10-day, and 20-day moving averages. This structure indicates strong buying momentum in the short term. Analysts suggest that if maintained, this could support bullishness in the coming weeks.
The resistance level around $0.185 remains a critical point, while the support level at $0.175 is holding strong, giving an advantage to the bulls.
According to GEMXBT, the Relative Strength Index (RSI) is in the overbought zone and the MACD indicator continues to provide optimistic signals. Thus, the upward momentum remains strong.
Source: X
Analysts warn that a high RSI could lead to a short-term correction. However, if the price remains above the MAs, DOGE is likely to continue moving upward.
Short-term volatility is possible, but more attention is focused on other critical levels, which are viewed as indicators for the next direction of the trading trend.
The DOGE price breakout and momentum accumulation pattern.
According to an analysis shared by Trader Tardigrade, Dogecoin recently broke out of a mid-term resistance trendline that had been held for several months. A similar breakout pattern appeared in February this year, when DOGE surged after a significant accumulation period.
Tardigrade explains:
“There are no signs of a false breakout, and the current technical structure looks very explosive.”
In his view, the descending wedge breakout and the double bottom accumulation pattern have both been confirmed.
Traders are closely monitoring these patterns as they often precede strong rallies in the crypto market.
Source: X
Historical price behavior shows that when Dogecoin accumulates momentum like it currently is, significant volatility can occur in a short timeframe.
Target prices above $0.28, even close to historical highs, are being discussed. At the time of writing, many are speculating whether this breakout could push DOGE past the $0.65 mark and towards $1.
Short-term selling pressure has been noted.
Market trends show positive developments, but some traders are still seeking quick sell opportunities at this time.
Andrew Griffiths has provided a new sell analysis, targeting signs of momentum exhaustion near the daily peak. Griffiths set a short position at $0.173 with a profit target at $0.167, alongside a tight stop loss.
DOGE has reactivated the previous supply zone, leading to liquidations at the nearest resistance level.
“The price created a strong reversal after attractive liquidity trades from the buy side.”
Such opportunities often arise when a buying frenzy concludes, allowing short sellers to capitalize on small price declines.
Source: X
However, short-term trading setups do not alter the overall bullish outlook unless key support levels are broken.
Despite having a negative outlook on DOGE, Griffiths still confirms that this cryptocurrency continues to maintain strength as long as essential support levels hold. The current DOGE market is operating under a model where short-term trades occur alongside the long-term trend.
Liquidation data reinforces the bullish argument.
Recent liquidation data has contributed to strengthening the likelihood of significant volatility for Dogecoin. Analysts have noted that leverage in the DOGE market has decreased significantly after a prolonged period of large liquidations.
This indicates that a large portion of over-leveraged traders have been eliminated, paving the way for more natural and less volatile price movements.
According to data from CoinGlass, the recent increase in both long and short liquidations may signal a return of market volatility. CoinGlass indicates that strong liquidation periods often reset market conditions, and initial liquidations like the current ones are often precursors to significant volatility in assets like Dogecoin.
Source: CoinGlass
Past liquidation trends from CoinGlass have also been recorded following periods of calm trading and low leverage, with DOGE prices typically showing a strong and rapid upward trend.
Many traders are closely watching these signals as they align with the overall technical setups indicating the potential for strong volatility in the near future.
Disclaimer: This article is for informational purposes only and is not investment advice. Investors should conduct thorough research before making decisions. We are not responsible for your investment decisions.