The largest meme coin, Dogecoin (DOGE), has seen a significant rise in recent days, although it is still far from its historical peak in 2021.
DOGE has shown a long-awaited pattern, rising 20% in the past 7 days.
DOGE has formed a golden cross, indicating that the price is expected to rise significantly in the near future.
What is a golden cross?
This situation is referred to as a 'golden cross,' known in Turkish as the golden intersection, and is regarded as a bullish signal by all markets.
The golden cross typically occurs when the 50-day moving average (MA 50) crosses above the 200-day moving average (MA 200). This cross indicates that short-term momentum currently outweighs long-term trends and has the potential to develop into a strong bull market.
Open interest surpasses $3 billion
Reports show that futures traders have amassed about 1.44 billion DOGE positions in a single day, a figure consistent with the $3.41 billion in open contracts when the price was around $0.25.
This figure is startling, as it indicates that a large amount of Dogecoin is in open contracts, not just in spot wallets. Some traders view this as a sign of renewed confidence.
Optimistic bets versus caution
The increase in open contracts and rising prices typically indicates new funds entering the market, which many market observers are now pointing out.
Meanwhile, the derivative trading volumes on some platforms have failed to keep pace with the open positions, which could make the trend vulnerable if momentum weakens or a large number of positions reverse.
Exchange data shows that while futures volume has declined, open interest has increased, indicating that more traders are holding positions rather than actively rotating. If market sentiment reverses, this dynamic could increase the likelihood of significant volatility.
What are the expectations for DOGE's price?
While the golden cross is generally viewed as a positive indicator for market prices, its historical performance has been mixed. However, this analyst points out that many significant fluctuations in Dogecoin have occurred after the appearance of a golden cross.
Looking ahead to 2024, Dogecoin's price rose over 130% in the four weeks following the golden cross on November 6, 2024. Looking back at 2023, analysts also noted a similar situation in November 2023, where prices rose 25% in about a month after the golden cross appeared.
Finally, a similar golden cross appeared in early November 2020, marking the beginning of a massive bull market that lasted four months and saw prices rise over 1,000%.
ETF concept and regulatory tailwinds
In addition to market speculation, institutions are optimistic about the prospects of a DOGE ETF. Polymarket gives a nearly 75% chance of approval, while Bloomberg analysts Eric Balchunas and James Seyffart have raised the approval rate for a spot DOGE ETF by the end of 2025 to 90%, citing a more favorable regulatory environment.
If approved, this would be a significant catalyst for Dogecoin's price, greatly enhancing its exposure among mainstream investors. Combined with whale buying, technical breakthroughs, and retail enthusiasm, it could lay the groundwork for DOGE's next 'moonshot.'
Currently, traders are focused on the resistance levels of $0.242 to $0.245, with a strong breakout possibly pushing towards $0.30, while holding the $0.227 support could maintain bullish momentum.
