Dogecoin Seeks $0.50 Following Triangle Breakout and Supply Challenges
The altcoin rally has gained momentum, with Bitcoin price crossing the $100,000 mark. Meme coins like Dogecoin #DOGE and Shiba Inu #SHIB are benefiting from this broader market surge.
The total market cap of meme coins has reached $126.58 billion, with trading volumes exceeding $33.50 billion in the past 24 hours. Top-performing meme coins include Dogecoin, rising by 6.64%, PEPE #PEPE, increasing by 5.53%, and Shiba Inu, which jumped 5.28%.
Source: Coinmarketcap
Dogecoin holds a market cap of $64.41 billion, dominating over half of the meme coin segment. Over the past 30 days, Dogecoin increased by 163%, followed by PEPE’s 158% rise and Brett’s #BRETT 152% jump.
Dogecoin Marks Triangle Break, Fails at $0.4655
Dogecoin's price trend remained within two converging trend lines, forming a symmetrical triangle pattern. A bounce-back from the local support trend line led to a breakout, with the price rising from $0.40 to a 24-hour high of $0.4655.
Source: Tradingview
The breakout failed to maintain dominance above $0.445, resulting in a quick reversal and currently trading at $0.43765. The R1 pivot level at $0.47201 indicates overhead supply, as Dogecoin has reversed from these levels multiple times in the past two weeks.
If the broader market recovers, Dogecoin could break above the R1 level for an extended rally, requiring a four-hour close above the $0.445 resistance zone. Targets for Dogecoin include R2 and R3 pivot levels at $0.50 and $0.55, while crucial support remains at the center pivot level of $0.41857 and the local support trendline.
Leverage Traders a Reason for Caution?
Following Dogecoin's short-term price increase, open interest rose by 12.10% to $3.91 billion, with trading volumes at $16.38 billion, a 48.38% increase. Despite bullish sentiments, liquidations over the past 24 hours indicate a different scenario, with Dogecoin experiencing $28.06 million in liquidations.
This includes long-side players losing $16.51 million and short-side sellers losing $11.55 million, suggesting stronger bearish sentiment. The long-to-short ratio of top traders is 5.04, while the open interest-weighted funding rate increased from 0.0110% to 0.0537% in the last 30 days, reflecting higher costs for holding long positions.
These factors contribute to heightened bullish sentiments among Dogecoin traders, leading to increased leverage.
Will Dogecoin Cross $0.50?
Despite Dogecoin’s breakout showing initial promise, the inability to sustain momentum suggests a potential short-term pullback. However, with Bitcoin surpassing $100K, increased risk appetite may drive the meme coin rally, enhancing the likelihood of Dogecoin crossing $0.50 in the mid to long term.
For price action traders, a closing price above the $0.445 supply zone on the 4-hour chart may signal a buying opportunity.