Dogecoin (DOGE) is currently trading around US$0.17, showing signs of potential reversal despite a minor pullback. A falling wedge pattern on the daily chart, rising trading volume, and bullish derivatives sentiment point to a possible breakout. However, DOGE still trades under critical moving averages, and a token unlock of nearly 98 million DOGE could inject short-term volatility.
Dogecoin (DOGE) is currently trading at US$0.17, experiencing an intraday pullback of close to 1%. Despite the decline, market dynamics indicate that the meme coin could be preparing for a possible bounce. 24-hour trading volume has increased by more than 15%, indicating increased market activity and investor interest.
Technically, Dogecoin is creating a falling wedge pattern on the daily chart, a traditional bullish reversal pattern that increases the odds of a breakout. This pattern, combined with the rise in volume, may shake out short-sided investors and set the stage for a rally.
Will this breakout rally liquidate nearly 1% of US$1.65 billion of DOGE Open Interest?
The chart indicates that DOGE dropped below the ascending trendline, which had served as support since early April. This trendline has been tested several times, and the recent price action at around US$0.17 (0.0% Fib retracement level) indicates that the support would no longer be sustained.
DOGE has also dropped below the 50, 100, and 200-period Simple Moving Averages (SMAs) on the 4-hour time frame. The convergence of the SMAs signals that the coin is under great bear pressure, and unless DOGE recovers the 100 SMA (US$0.174), short-term prospects may remain bearish.
DOGE witnessed a pullback from a recent high around US$0.193, and Fibonacci retracement levels based on that movement offer the following resistance levels:
23.6% Fib Level: US$0.184
38.2% Fib Level: US$0.193
50.0% Fib Level: US$0.201
A recovery above US$0.176 (50 SMA) would probably set the stage for DOGE to explore the US$0.184 - US$0.193 zone again, particularly if sentiment turns positive in the wider crypto market. These levels would be strong resistance unless coupled with a significant volume spike.
Dogecoin is testing the lower trendline of a falling wedge formation, printing clues of a likely bounce as buyers intervene around support. The formation is suggesting an upcoming upmove, particularly with the MACD and signal lines approaching a bullish crossover.
Additionally, the 200-period SMA supports DOGE, adding strength to the reversal case. However, the price has fallen below the 50 and 100 SMAs in this pullback, increasing the likelihood of a bearish crossover. If that happens, it may induce fresh selling pressure.
DOGE reclaims the US$0.170 - US$0.176 resistance level and confirms it with high volume.
The MACD crossover is seen, and the price goes above US$0.184 (23.6% Fib).
Price targets: US$0.184 - US$0.201
Price cannot hold US$0.166 and closes several candles below the trendline support.
Bears drive the price down towards US$0.152 and potentially lower.
Price targets: US$0.152 - US$0.130
The Dogecoin derivatives market is registering a combination of bullish and cautious sentiment. The 24-hour trading volume has reached US$2.17 billion, reflecting renewed interest from traders, while open interest has dipped slightly by 2.39% to US$1.67 billion, reflecting some profit-taking or closing of positions.
The long/short ratios of major exchanges such as Binance and OKX reveal a strong bullish direction, exceeding 2.6, which shows increasing long interest among traders.
In the coming week, Dogecoin will unlock about 97.89 million tokens, worth some US $16.57 million. The unlock amounts to roughly 0.07% of the circulating supply. While that is quite small as a percentage, these types of unlocks have the ability to affect market movements, particularly if they occur concurrently with other substantial occurrences.
Dogecoin shows early signs of a possible rebound, supported by a bullish falling wedge formation, increasing volume, and an imminent MACD crossover. Still, price continues below essential SMAs and is pressured by a pending 98 million token unlock that will probably ignite near-term volatility.
While the signals indicate a potential breakout, investors should wait for confirmation above resistance levels like US$0.176 before entering. Thus, this remains a situation of guarded optimism rather than greedy accumulation.