The TD Sequential buy signal for Dogecoin suggests a rebound. Meanwhile, Binance traders hold 75% long positions, but the strong liquidation cluster between $0.215 and $0.225 could trigger market volatility.

Dogecoin [DOGE] has recently attracted attention as the TD Sequential indicator flashed a buy signal on its 4-hour chart, suggesting a potential short-term rebound.

The memecoin has been in a downward trend for weeks, but at the time of writing, its trading price is $0.218, maintaining near key support levels.

Such buy signals often precede local reversals, especially when sentiment and positioning align.

Therefore, traders are closely watching whether this signal can trigger a rebound, stabilizing prices and laying the groundwork for a stronger recovery.

Can DOGE reach $0.42?

The daily chart highlights a forming cup and handle structure, which could propel Dogecoin's next breakout. This pattern suggests that if the price breaks the neckline resistance, bullish momentum will continue.

Key resistance levels are at $0.244 and $0.277, and both must be broken to accelerate upward momentum. If confirmed, Dogecoin could continue its upward trend towards $0.42 (the target price predicted by this structure).

However, if these obstacles are not overcome, bulls may get trapped. Thus, the next few trading days are crucial to determine whether this bullish pattern can maintain its upside potential.

Strongly betting on DOGE's breakout?

Currently, market sentiment in Binance derivatives is strongly bullish, with long accounts dominating at 75%, while short accounts only make up 25%.

This deviation indicates that traders expect a rebound, consistent with the technical patterns pointing higher.

However, if the price retracts, such a large long exposure may increase the risk of a cascading liquidation.

Nevertheless, strong positioning provides liquidity support that could help push Dogecoin through its current resistance levels.

Thus, the combination of a bullish chart structure and dominant long positions presents an interesting setup for speculators focused on upward continuation.

Will the liquidation clusters exacerbate volatility?

The liquidation heatmap shows significant pressure zones, with a large cluster of liquidations concentrated around the short position at $0.215 and the long position at $0.225.

These pockets represent levels where sharp volatility may force traders to exit their positions, thereby exacerbating volatility.

If DOGE falls below $0.215, long liquidations could accelerate selling, while breaking above $0.225 could trigger a short squeeze.

Therefore, as the price hovers between these levels, traders must remain cautious.

A decisive move beyond either threshold could determine the next short-term trend, deciding whether Dogecoin consolidates or breaks out.

Summary

With the TD Sequential buy signal, cup and handle structure, and dominant long positions all pointing to further upside, Dogecoin is poised for a bullish recovery.

Despite short-term volatility around $0.215 to $0.225, the alignment of technical patterns and sentiment increases the likelihood of breaking through $0.244 and $0.277.

Once these levels are broken, Dogecoin is very likely to break through $0.42. Therefore, the outlook is favorable for buyers, and the current market conditions support a sustained recovery rebound rather than further declines.