Despite experiencing a 2% decline over the past week, Dogecoin [DOGE] continues to outperform its competitors, who have seen a substantial 10% drop. Following a recent surge, DOGE has surpassed the $0.14 threshold, a level it hasn’t touched in the last two months.
Trading currently at $0.1383, DOGE seems to be emulating Bitcoin’s patterns, leading analysts to speculate on whether DOGE is still diverting investments from BTC during this volatile market phase.
Should this trend persist, a potential underlying pattern might propel Dogecoin past its previous resistance levels, even amidst the prevailing bearish market sentiment.
DOGE Potentially Gearing Up for a Rebound
Presently, Dogecoin stands at a critical crossroads. With a significant liquidity cluster at $0.144, surpassing this barrier could trigger short squeezes, forcing those with short positions to cover, potentially propelling the price higher.
During the recent bullish cycle when BTC nearly touched $70K, DOGE displayed daily gains exceeding 7%, while other meme coins struggled to gain traction, with Ethereum lagging behind.
These factors have sparked increased optimism among traders.
Consequently, the futures market has witnessed a surge in long positions over the last 24 hours, with traders speculating on a potential rebound. With DOGE’s market cap rising by 2% to $20.22 billion, traders holding long positions are encouraged by the possibility of a reversal, positioning DOGE to leverage the current market volatility.
In essence, if BTC maintains its current consolidation at these price levels, resulting in substantial weekly gains for leading altcoins, Dogecoin could be poised for another rally, establishing new resistance levels above $0.143.
This aligns with a popular trading strategy where high-cap altcoins are perceived as more appealing options during periods of significant market risks. Given DOGE’s current standing, it’s reasonable to consider the potential for it to redirect investments from BTC. Nonetheless,
Factors Possibly Impeding Progress
While Dogecoin appears primed for a rebound as spot traders eagerly buy the dip, the erratic order book of large holders could pose obstacles.
Recent days have seen significant holders, particularly whales, who control a notable 42% of the supply with over 66 billion DOGE, entering a distribution phase, coinciding with a recent 7% decline that drove DOGE to $0.131.
Despite a brief selling spree, DOGE bounced back with a 4% increase the following day but has not fully recovered from the notable sell-off.
Therefore, caution is advised. Despite the optimism around a potential rebound and the overall volatility that favors DOGE, if this group of holders does not cooperate, Dogecoin could struggle to capitalize on this opportunity. Monitoring their actions in the days ahead will be crucial.