After merging within a pre-defined range, it will… Dogecoin price Shows early signs of recovery. The price defended a key support area near $0.071 as buyers regained control after weeks of sustained selling pressure. The memecoin rebounded towards the downtrend line, while momentum indicators began to improve. This indicates a potential shift in sentiment in the short term, while liquidation data reveals the potential for short-term pressure.
Can Dogecoin price break through the resistance and extend the current retracement range towards $0.08?
Dogecoin holds key support as bulls challenge trendline resistance
Dogecoin rebounded after successfully defending the $0.071-$0.072 demand zone, a level that repeatedly attracted buyers over the past few weeks. The daily chart shows DOGE bouncing off this support as it attempts to break above the downtrend line that has capped every rebound since late June.
The Relative Strength Index (RSI) rose to around 45, recovering from oversold territory and indicating improving buying momentum. However, the indicator is still below the neutral 50 mark, indicating that bulls still need a stronger follow-through to confirm the ongoing trend reversal. Furthermore, the Bollinger Band indicator is showing signs of contraction which usually results in a significant price movement, perhaps above the band resistance at $0.076.
A short liquidation set indicates a potential acceleration in the uptrend
Beyond the price chart, derivatives data also supports the possibility of a stronger recovery. According to CoinGlass’s 30-day liquidation map, a large concentration of short liquidations lies between $0.075 and $0.081, which is well above DOGE’s current trading range. This indicates that many traders are betting on further downside, creating a potential fuel source for an upward move. Meanwhile, the liquidation map shows relatively fewer long liquidation clusters below the current price. This suggests that much of the downward liquidation pressure has already been absorbed.
If Dogecoin can break above the immediate resistance near $0.074, these leveraged short positions could start to unwind, forcing traders to buy back their positions. Such a chain reaction, known as a short squeeze, often amplifies upward momentum and drives prices higher over a short period. As a result, a confirmed breakout above the downtrend line may encourage DOGE to target the $0.076-$0.081 liquidity zone in the near term.
Can DOGE price rise towards $0.08?
Dogecoin’s near-term trajectory will likely depend on whether buyers are able to sustain the current recovery and reclaim key resistance levels. A decisive move above the immediate hurdle can attract new buying interest while also liquidating leveraged short positions, potentially accelerating the upward move.
The first hurdle lies in the range of $0.074 – $0.076; A sustained close above this range would indicate strengthening bullish momentum. On the downside, the support level at $0.071 remains the level to watch. Losing this area will invalidate the current retracement setup and expose the meme to a deeper correction towards $0.069 or lower.
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