Dogecoin (DOGE) has just recorded an impressive breakout, surpassing a downtrend line that has lasted for several months – a move that could signal a reversal in the long-term trend.
This breakout is not coincidental: it occurs after a series of lower highs and is confirmed by the weekly candle closing above a significant resistance level.
The price level that once acted as a solid barrier since December 2023 is now showing signs of transforming into a new support zone.
However, for the upward trend to be truly reinforced, DOGE needs to maintain its position above $0.19 and establish a higher low. If the price continues to surpass the $0.22 level, the upward structure will be clearly established, completely erasing the previous bearish pattern.
Green light for the next price surge of Dogecoin
The funding rate of DOGE has clearly shifted to a positive state, reaching 0.0163% at the time of writing. This development indicates that the bulls are taking the initiative, willing to pay higher fees to maintain positions – a signal that often reflects strong confidence in past upward trends from futures traders.
However, if the funding rate continues to accelerate too quickly, the market may enter an overheated zone, posing a risk of a short-term correction.
At this moment, the positive funding rate is supporting the upward trend, especially when combined with persistent buying pressure in the spot market.
At the same time, open interest (OI) also recorded a sharp increase of 14.03%, reaching 3.12 billion USD – indicating that large amounts of money are flowing into the derivatives market. This is a clear sign that traders are actively opening new positions, expecting DOGE to soon make a significant breakout.
Notably, the increase in open interest occurs alongside improved market sentiment, reflecting a willingness to take risks in pursuit of higher prices in the future.
However, one cannot overlook the risks from high-leverage positions – a factor that can make price volatility severe if the trend unexpectedly reverses and investors cannot react in time.
Overall, the current trend still supports the bulls as long as open interest continues to expand in tandem with prices.
Dogecoin continues to be withdrawn from exchanges
On-chain data shows that net outflows from exchanges are still ongoing, with a total value of up to 3.70 million USD at the time of writing. This development not only reflects a decrease in selling pressure but also indicates growing confidence among long-term investors in the potential of DOGE.
Withdrawing assets from exchanges is often understood as a sign of an accumulation strategy — when investors choose to store assets in personal wallets instead of short-term trading. This behavior is characteristic of market stages that begin to accumulate again.
If this trend continues, DOGE could enter a state of supply scarcity on exchanges, creating favorable conditions for price recovery, especially when new money from individual or institutional investors starts to return to the market.
Are the bulls on Binance overconfident?
In the DOGE/USDT market on Binance, the bulls are in a dominant position with 73.78% of traders trusting the upward trend. The Long/Short ratio has surged to 2.81, reflecting a clear bias towards long positions.
This development further strengthens the optimistic sentiment surrounding DOGE's recent breakout. However, a strong bias in one direction also carries risks if the market suddenly reverses.
In fact, when long positions become overwhelmingly dominant, the market is prone to complacency — an ideal condition for sudden strong shakeouts.
Therefore, to avoid a scenario of mass liquidation, DOGE needs to maintain its upward momentum in the short term to protect market sentiment and sustain upward momentum.
Conclusion: Dogecoin enters a positive zone, but further confirmation is needed
Dogecoin has just broken through a significant resistance zone and received strong confirmation from both derivatives and on-chain data.
The increase in open interest, the funding rate turning positive, along with continuous net outflows from exchanges are clearly reinforcing the bullish outlook for DOGE.
However, the unusually high long position ratio also poses a risk of correction if the upward momentum meets resistance. Overall, Dogecoin is presented with an opportunity to expand its upward trend, but to confirm a sustainable reversal, the price needs to stabilize above $0.19 and soon conquer the $0.22 level.
