DOGE is consolidating in a tight range with multiple bounces from key support. Is this price compression the “calm before the storm” for a strong breakout?
Dogecoin may be preparing for its next move in the market. After nearly a week of trading between $0.14 and $0.17, the price pattern is showing signs similar to previous periods of compression, which often precede strong breakouts. Notably, DOGE bounced early in the last week of Q2 from a support zone last tested in early April, which could be a springboard to $0.20 if buyers continue to hold the initiative.
However, the situation remains fragile. Since peaking near $0.25 in early May, DOGE has failed to break out three times, each time met with strong liquidations, suggesting that buying power is not yet solid. Furthermore, the recent drop to $0.14 was the fourth consecutive low in 60 days, reinforcing a bearish market structure.
In the derivatives market, the DOGE/USDT perpetual contract on Binance shows a 75% long position ratio, reflecting strong trader confidence. However, the large concentration of long positions also increases the risk of collective liquidation, which could lead to a subsequent strong long sweep. Conversely, if strong on-chain demand sustains these leveraged positions, the current accumulation phase could be a preparation for a longer-term uptrend.
In this case, the bulls could create a bear trap, catching oversold positions out of the market.
DOGE Leveraged Debt Release Signals Market Stabilization
Analysis of DOGE’s recent price action shows that it’s more than just a surface level move. The 32% drop from its early May high of $0.25 was more than just a technical correction. In fact, it was a massive leveraged liquidation, with a 96.29% long position liquidation rate as overextended investors were forced to close their positions.
However, the liquidation dominance has since dropped sharply to just 6.14%, the lowest this month, indicating that the risk of a major liquidation has passed. It is worth noting that when the liquidation ratio reached 97.56% on June 21, DOGE did not fall as deeply as last time, which may signal a more stable market structure beneath the surface.
This suggests that the current trend of long positions may be a strategic accumulation process after the liquidation, rather than reckless holding of leverage. This scenario could lead to a classic bear trap, where short positions are clamped down to create a bullish wave towards the $0.20 mark.
Summary
Dogecoin is going through a significant accumulation phase with mixed action from both the buyers and sellers. While bearish pressure remains with lower highs and heavy liquidations ahead, signs of stability and strategic accumulation could pave the way for a breakout in the near future.
Investors should closely monitor the current support zone and the position behavior in the derivatives market to identify opportunities and risks. If the uptrend is confirmed, DOGE could soon head towards the target price of $0.20, marking a new step forward in the cryptocurrency market.
Source: https://tintucbitcoin.com/dogecoin-tich-luy-bay-giam-gia/
Thank you for reading this article!
Please Like, Comment and Follow TinTucBitcoin to stay updated with the latest news about the cryptocurrency market and not miss any important information!
