- Dogecoin is showing signs of a double bottom reversal pattern, with key technical indicators and rising trader interest pointing to a potential breakout toward $0.25.
- However, it faces multiple resistance levels and mixed sentiment in derivatives markets before confirming a sustained bullish trend.
Dogecoin (DOGE) is showing encouraging signs of a potential reversal pattern known as the double bottom. As the broader crypto market faces downward pressure, DOGE has remained relatively stable around $0.21, hinting at a breakout attempt toward $0.25. This article dives into the technical signals and market data suggesting a possible bullish turn for the popular meme coin.
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Dogecoin Consolidation Points to Reversal
On the 4-hour chart, Dogecoin has been trading sideways between roughly $0.2177 and the $0.25 resistance zone. The coin currently consolidates near the lower boundary of this range, facing a near-term resistance at $0.2302. This price action forms a classic double bottom pattern, where DOGE tests a support level twice before aiming higher.
Key technical indicators support this outlook. The MACD and signal lines are close to a bullish crossover, while bullish divergence on the MACD confirms upward momentum building within the double bottom pattern. However, the Supertrend indicator still flags a bearish trend, meaning DOGE must first break above $0.2349 to confirm a genuine reversal.
Fibonacci retracement analysis also highlights resistance at $0.2401, a key short-term hurdle before the coin can test the $0.25 supply zone. If this level is breached, the next target could be around $0.2680, based on Fibonacci extensions.
Mixed Sentiment in Derivatives Market
While technicals hint at optimism, derivatives data reveals a mixed sentiment among traders. Open interest in Dogecoin futures has risen 2.89%, now at $2.71 billion, signaling increased trader activity and anticipation of price movement.
The funding rate remains positive at 0.0070%, supporting bullish intent. However, recent liquidations tell a more nuanced story: long positions faced $4.51 million in liquidations over the last 24 hours, compared to $1.41 million for shorts. Despite this, the long-to-short ratio has increased from 0.915 to 0.945, with long positions now making up 48.59% of the market — a sign that bulls are regaining strength.
What’s Next for Dogecoin?
Dogecoin’s price must overcome several technical resistance points before confirming a sustained uptrend. If it breaks above $0.2349 and holds above $0.25, the meme coin could test higher levels near $0.2680. On the downside, support near $0.2177 and $0.2037 will be critical to watch for any sudden reversals.
Overall, DOGE shows resilience amid broader market weakness, and the developing double bottom reversal pattern may offer traders a bullish opportunity if confirmed.
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