Dogecoin (DOGE) Price Setting Up For 50% Breakout

Dogecoin Price Analysis

Dogecoin price has stagnated within the $0.10 – $0.11 narrow range over the last 3 days, derivatives markets data suggest DOGE is setting up for a breakout

Dogecoin Price Fails to Break $0.11 Resistance

Over the weekend, Dogecoin experienced a stall in its upward momentum after rebounding from a significant decline at the beginning of August. The market’s initial negative sentiment began to diminish following the drop, leading to a strong recovery that saw DOGE price climb back into the $0.10 range.

However, this recovery has not been without challenges. Dogecoin failed to break past the $0.11 resistance level, causing a 15% decline as traders locked in profits from the recent gains. The market’s rejection at $0.11 and the subsequent pullback have set the stage for cautious trading, with market participants closely watching for signs of the next major move.

Despite the price rejection, recent developments in the derivatives market suggest a potential bear trap. The DOGEUSD chart highlights the price action, showing the rejection at $0.11 and the gradual decline.

Bull Traders Maintain Positions with $29.05M Leverage

In the derivatives market, there is clear evidence that bull traders are holding their ground despite the recent correction.

According to Coinglass’ Liquidation Map, DOGE long positions stand at $29.05 million, while short positions are at $11.95 million. This significant disparity indicates that bulls are prepared to defend the current levels, even after the price correction.

If the bearish forces fail to drive the price below the critical $0.10 support level, it could trigger a bear trap, leading to a sharp reversal. This scenario would trap short sellers in losing positions as the price moves higher, forcing them to cover their shorts and potentially fueling further upward momentum.

Dogecoin Price Forecast: Next Rally Could Challenge $0.12

Looking ahead, Dogecoin’s ability to hold above the $0.10 level is crucial for maintaining the bullish outlook. If the price can stabilize and push higher, the next key resistance to watch will be around $0.12. A break above this level could set the stage for a more extended rally, potentially targeting the $0.13 to $0.15 range.

The Relative Strength Index (RSI) is currently hovering around the 43.62 mark, indicating that DOGE is not yet in overbought territory, leaving room for further upside. However, if the price breaks below the $0.10 support, the bullish scenario could be invalidated, leading to further downside risk.

In summary, while Dogecoin’s price consolidation may seem uneventful, the underlying market dynamics suggest that a significant move could be on the horizon. Traders should keep an eye on the $0.10 support and $0.12 resistance levels as key indicators for the next potential breakout.