Dogecoin (DOGE) has successfully broken through the previous downtrend channel and retested a key support level, steadily maintaining above $0.22, confirming its bullish structure.

Currently, the trading price of DOGE is $0.2238, having increased by 3.37% in the past 24 hours. If it breaks through the resistance range of $0.25, Dogecoin is expected to reach higher targets.

Key resistance level: $0.25 range.

$0.25 is currently the main resistance level, which acted as a support level in February before turning into a supply zone.

If DOGE successfully breaks through this level, it may lay the foundation for further upward movement to $0.35.

Conversely, if it fails to break through $0.25, Dogecoin may face a short-term pullback.

Short liquidations dominate, driving bullish pressure.

On-chain liquidation data shows that bulls are clearly dominant; on May 18, the total liquidation amount for shorts reached $387,000, while the total liquidation amount for longs was only $65,000.

The forced liquidation of shorts has intensified the short squeeze in the market, which often accelerates price volatility and provides upward momentum.

The MVRV Z indicator shows room for upward movement.

As of the time of writing, Dogecoin's MVRV Z value is 0.94, far below the usual valuation peak of 2.5. This indicator assesses the profitability of average holders by comparing market value to actual value.

Lower MVRV values indicate that most holders have yet to realize profits, thus lacking the motivation to sell actively. This means the current market still has upward potential.

DOGE may trigger volatility concerns.

DOGE's stock-to-flow ratio has soared to 99.53, showing that the growth of circulating supply has significantly slowed or stopped, increasing the perceived scarcity in the market.

However, this change may also signal abnormal volatility in market activity or an impending sharp price fluctuation.

Historically, a sharp rise in the stock-to-flow ratio is often associated with significant volatility, followed closely by rapid price increases or adjustments.

Short-term speculative interest diverges from user growth.

Although DOGE's price surged significantly in early May and daily active addresses once exceeded 500,000, it quickly fell back to only 28,600.

Trading volume has also fallen from a monthly high to 88,000 transactions, indicating that the price increase may be primarily driven by short-term speculative interest rather than long-term user growth or actual application support.

The outlook for the derivatives market is mixed.

The derivatives market for Dogecoin is also showing mixed signals.

Total trading volume has decreased by 22.05%, down to $3.46 billion, indicating a decline in speculative participation.

However, open interest (OI) has increased by 2.7% to $2.64 billion, indicating that many traders are still holding positions.

In particular, the open interest in options surged by 10.61% to $378,980, indicating a high market interest in volatility or hedging demand.

Can it break through $0.25 and maintain an upward trend?

With strong short liquidation pressure, an undervalued MVRV ratio, and gradually rising OI support, Dogecoin has significant potential to break through $0.25 and maintain upward movement.

However, the inconsistency in on-chain activity and the sudden surge in the stock-to-flow ratio suggest that the market may face short-term volatility risks.

Despite the bullish momentum remaining strong, to confirm a break above $0.25 and maintain an uptrend, DOGE needs to sustain strong trading volume and overcome short-term volatility challenges.

Once successfully broken, the cryptocurrency may target a price level of $0.35.