Dogecoin (DOGE), the world’s largest meme coin with a market cap of over $13.35 billion, is poised for a significant upward rally. On a daily chart, DOGE is showing a bullish divergence in the Relative Strength Index (RSI), indicating a possible trend reversal from a downtrend to an uptrend.
Bullish Divergence in Dogecoin
Since early August 2024, DOGE has been forming lower lows, while the technical indicator RSI is making higher lows. This indicates that the selling pressure that DOGE has been experiencing for a long time may decrease in the coming days. Traders and investors see bullish divergence as a potential buy signal.
Dogecoin Price Prediction
According to expert technical analysis, DOGE is currently trading at a crucial support level of $0.095. Moreover, it is trading above the 200 Exponential Moving Average (EMA) on a weekly time frame, indicating that it is in an uptrend.
Based on historical price momentum, when the DOGE price reaches this support level, it typically sees an upside rally of 15% to 20%. However, due to the bullish divergence, there is a high chance that it could surge by 32%, reaching the $0.128 level this time.
Bullish On-Chain Metrics
DOGE exchange liquidation data from CoinGlass shows that short sellers are still dominating and potentially liquidating long positions on daily and weekly timeframes. On a weekly timeframe, key liquidation levels are at $0.0956 on the downside and $0.103 on the upside as traders are over-leveraged at these levels.
If sentiment remains bearish and DOGE fails to hold the $0.0956 level or 200 EMA, long positions worth nearly $4.78 million will be liquidated. Conversely, if sentiment shifts and price rises to the $0.103 level, short positions worth about $22 million will be liquidated.
The trading positions of short sellers are almost 4 to 5 times higher than the long positions of the bulls, which simply indicates the dominance of the bears.
Rising open interest and price momentum
At the time of going to press, Dogecoin (DOGE) is trading around $0.0968 and has experienced a price drop of almost 2% in the past 24 hours. Despite the price drop, the open interest has increased by 1% in the past few hours and by 1.5% in the past four hours. This rising open interest shows the growing interest of investors and traders in DOGE amid the market downturn.
