21 May

The recent surge in Dogecoin's (DOGE) price suggests a potential for gains as it indicates a recovery trend. Historically, instances of short liquidations within the past 24 hours have often been succeeded by price increases, and this pattern could repeat itself this time.

Will Bears on Dogecoin Retract?

As the whole cryptocurrency market surged in value last day, Dogecoin's price increased by 11%, putting the meme coin to trade at $0.163. As evidenced by the quick liquidations totaling close to $7 million, this caused the traders who were hoping for a price decline to lose their money.

In almost two months, this is the biggest one-day short liquidation. Large liquidations have historically resulted in increases in the days that follow, and this is currently expected. While investors wait for a rally, this liquidation may also cause the bears to retreat.

Investor optimism is on the rise, driven by the potential for $1.28 billion in profits. The Global In/Out of the Money (GIOM) indicator reveals that approximately 7.87 billion DOGE were purchased within the $0.16 to $0.18 range. This sizable supply stands to become profitable as Dogecoin's price shows bullish signals. However, realizing these profits would necessitate surpassing the $0.16 resistance level. With DOGE holders nearing substantial gains, it's probable they will respond accordingly until the altcoin reaches $0.18.

DOGE Price Forecast: How High Will It Go?

Over the past month, the price of Dogecoin has fluctuated inside an ascending triangular pattern. The upward-sloping trendline and the horizontal resistance line of the ascending triangle pattern define it as a bullish continuation pattern. It suggests that buyers are getting stronger over time, which frequently results in a breakout above the resistance level.

As of this writing, DOGE is deviating from this pattern, with volumes steadily falling. On the other hand, the trend will be confirmed if the meme currency records a 22% increase to $0.20. This pivotal pricing point serves as both a critical psychological support and a target, as indicated by the pattern.

A more realistic scenario entails Dogecoin's price surpassing $0.18, thereby rendering the previously mentioned supply profitable. Conversely, if Dogecoin fails to breach the $0.16 mark, it could result in a regression to the established pattern. This would transform the breakout into a fakeout, potentially causing DOGE to decline to $0.15 or even lower. As a result, the bullish thesis would be invalidated.

May 2024, Cryptoniteuae

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