The price of Dogecoin (DOGE) appears primed for a major bullish reversal, supported by technical indicators and market sentiment data. Despite recent downward pressures, several factors suggest a possible upward path for the popular memecoin.
#1 Dogecoin bounces off key support level (Chart 1D)
Crypto analyst CRG (@MacroCRG) highlighted the resilience of Dogecoin and PEPE, another prominent memecoin, saying, “DOGE + PEPE are both bouncing from important areas. Memecoin exchange rate is up today against IMO. The next step up will surprise many.”
CRG's technical analysis indicates that DOGE has maintained a daily close above the critical support level of $0.385 for nine consecutive days, despite heavy selling pressure. Similarly, PEPE has maintained vital supportindicating that the “memecoin season” may be coming back soon.
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For Dogecoin, the short-term resistance zone at $0.42 remains an important level. CRG suggests that a break above this threshold could signal the start of a new bull run, which could catch many investors off guard.
#2 Bullish Market Structure (4-Hour Chart)
Further technical insight comes from crypto analyst Gonzo (@GonzoXBT), who provided a technical analysis of Dogecoin's price action. Gonzo explained, “DOGE 4H EMA100 -> acts as front 4H EMA200 -> acts as support. Until we turn 4H EMA100 we just cut in between, we don't want to see it lose 4H EMA200 tho.”
This analysis emphasizes the importance of the 4-hour moving averages (EMAs) in determining short-term price movements. The 4H EMA100 is currently a resistance level, while the 4H EMA200 offers support. A sustained break above the 4H EMA100 could facilitate a breakout, but failure to sustain above the 4H EMA200 could lead to further consolidation or decline.
#3 Trade against the people
Crypto analyst Ali Martinez (@ali_charts) provided another bullish view on DOGE's immediate outlook. He noted, “Market sentiment is for Dogecoin it turned negative. Traders seem to be getting impatient during the ongoing price consolidation!”
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Martinez's analysis, based on Santiment data, shows a sharp decline in both search volume and stressed sentiment. In particular, the feeling of stress has fallen to its lowest level since mid-October, while the survey volume has fallen to levels not seen since early November.
Martinez speculated on catalysts that could quickly restore positive momentum for Dogecoin, referring to the establishment of the new tool. US Department of Government Efficiency uunder the leadership of Elon Musk. He suggested, “Or you can wait for the first POPULAR action at the Department of Government Efficiency. “
#4 Liquidation Dynamics reveals potential upside
Adding another level to the bullish thesis, crypto analyst Carlos Garcia Tapia (@CAGThe3rd) divided insight into the liquid heat map over the past three days, saying, “FOMO longs just got out on the 3D chart. DOGE.”
The heat map by Coinglass shows a significant liquidation of leveraged long positions accumulated between $0.393 and $0.385 over the past two days. But there is a bullish caveat: with most of the longs now liquidated, the remaining liquid pool is located around the $0.42 mark.
This setup suggests that Dogecoin could experience the formation of bullish candles, which could trigger further dilution of bearish positions and move the price up. Why? Because liquidity heat maps are valuable tools in predicting price movements because they reveal the underlying market liquidity and leverage dynamics.
These heat maps highlight where traders are most susceptible to forced liquidation, acting as psychological and technical barriers. When the price approaches these levels, large market participants can influence price direction by triggering a cascade of liquidations, thereby amplifying the resulting price movement. .
At press time, DOGE was trading at $0.3843.
Featured image created by DALL.E, a chart from TradingView.com
