Dogecoin has just recorded a strong price increase, surpassing the $0.2000 mark - a key psychological and technical resistance level. With an impressive recovery of over 44%, the market is witnessing a wave of excitement from retail investors. However, many experts warn that this upward trend may not last long, and a deep correction could very well occur in the near future.

Retail Investor Excitement Could Create Selling Pressure

Currently, DOGE is trading around $0.2060 after surpassing the $0.2000 level with strong support from derivatives demand and retail investor FOMO (fear of missing out) sentiment. According to data from Glassnode, the number of DOGE tokens 'in profit' (supply in profit) has increased to 86 billion DOGE.

Although many investors being in profit sounds positive, it also poses a significant risk. In the past, when the 'supply in profit' index surged, profit-taking usually occurred en masse, especially from those who bought at low price levels. A typical case was in May when the number of profitable DOGE reached a peak of 121 billion; the market subsequently witnessed a deep correction.

Selling Signals from Exchanges Also Ring Alarm Bells

Another negative signal is the increasing DOGE balance on exchanges. From mid-June until now, the amount of DOGE on exchange wallets has increased by about 300 million DOGE, from 23.2 billion to 23.5 billion. Moving coins to exchanges is often a preparatory step for selling, indicating that many investors may be looking to take profits in the short term.

When combined with the rising 'supply in profit' index, this further reinforces the risk of a correction if market sentiment turns negative, especially if Bitcoin starts to fluctuate strongly again.

Technical Indicators Still Support the Uptrend - But How Long?

Technically, Dogecoin is still maintaining its uptrend. The price is above the 200-day EMA (currently at $0.2027), and the RSI is approaching 65 - a sign that upward momentum remains. The Money Flow Index (MFI) also shows a strong inflow of funds, supporting a 'risk-on' sentiment.

However, the RSI nearing the overbought zone (above 70) is causing investors to worry about a potential reversal. If DOGE breaks below the 200-day EMA, the downtrend could pull the price back to the old support area around $0.1429 - the bottom reached in June.

Derivatives Market: Optimistic but Volatile

The open interest (OI) of Dogecoin in the derivatives market is also rising sharply, from $1.64 billion in June to $2.67 billion currently. This reflects strong expectations for short-term price increases. However, high OI in an 'overheated' market can be a double-edged sword - if prices drop sharply, forced liquidations could occur en masse, exacerbating the decline.

Summary

Despite Dogecoin being in a strong recovery phase with support from retail investors and positive technical signals, fundamental factors such as selling pressure from profitable supply and the flow of coins into exchanges remain warning signals. Investors should closely monitor the $0.2027 price level - if this level holds, DOGE could continue towards the $0.3000 mark. Conversely, if support is lost, a deep correction cannot be ruled out.