Dogecoin Holds Key Support as Traders Brace for Major Breakout or Breakdown

4h ago•

bullish:

bearish:

Trader Tardigrade anticipates Dogecoin will first retest its resistance level, aiming for $0.40 as a potential long-term target.
DOGE’s selling pressure from whales caused the price to fall to $0.215 and made me cautious for a short span.
Despite $7 million in long liquidations, data from Binance show top traders are very bullish.

Trader Tardigrade (TATrader_Alan) believes that the next few days could see a major price surge for Dogecoin ($DOGE). A recent post on X mentioned that DOGE has reached the ‘first leg’ of consolidation slightly below resistance, and there could be several retests before the price moves up to $0.40.

He also pointed to a rarely seen tightening in Dogecoin’s 2-month Bollinger BandWidth (BBW), calling it “fascinating” and historically linked to large price movements. This analysis led him to believe that DOGE has the potential to rise to at least $1 in the near future and could even reach $30 over the longer term by 2026.

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The analysis is aligned with DOGE’s recent pattern of breaking out from a descending wedge. Following the breakthrough at $0.1750, the price surpassed $0.1900 as a result of increased volume. Before going higher, traders are expecting $0.22 to act as key support.

Whale Dump Pushes DOGE to One-Week Low

Despite the strong upward momentum, Dogecoin faced a large amount of selling this weekend. According to Santiment, there was a massive sale of 170 million DOGE by big holders within 24 hours. Those wallets had between 10 and 100 million DOGE, which reduced their total holdings from 23.91 billion to 23.74 billion.

The quick selling drove the price down from $0.24 to $0.215, reaching a new one-week low. According to CoinMarketCap, trading volume dropped by 34%, pointing to declining excitement in the market while it corrected. Dogecoin saw a drop of 10% but recovered by 4.49% shortly after.

Since traders are more cautious, the $0.22 range is being watched very closely. A strong rise following this region could attract buyers, especially as long-term investors accumulate.

$7M in Long Liquidations Signals Risk-Off Sentiment

Dogecoin traders saw liquidations totaling almost $7 million in the derivatives market. Rekt says $6.78 million in those losses were long positions while short positions were $1.14 million.

On the other hand, open interest on CoinGlass was down 6.9% to $2.58 billion. The current long-to-short ratio across exchanges is 0.94 which shows a slight bit of a bearish positioning. Yet, professional accounts remain optimistic, with Binance showing a long-short ratio of 3.26 in its trader data.

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Dogecoin’s RSI is currently 61.60, indicating that its movement is trending up, though it is not yet too strong. Volume profile shows that accumulation tended to be higher near the levels where stock prices burst out. Analysts say the price is likely to fall back to retest $0.1800 before regaining momentum for $0.30 and $0.40.