Dogecoin Shows Resilience Amid Largest Crypto Leverage Flush Since 2021
The crypto market experienced the largest leverage flush out since April 2021 on December 9. During this market shakeout, Dogecoin (DOGE) demonstrated notable strength. Crypto analyst CRG (@MacroCRG) stated that DOGE is showing resilience compared to the broader altcoin market in a post on X.
Reasons for Dogecoin's Strength
Despite the downturn, Dogecoin maintained a crucial support level. CRG noted, “DOGE looks incredible. Whole market shat itself but it barely flinched + didn’t break structure.” The chart shared by CRG indicates several key factors supporting his positive outlook for DOGE.
Firstly, Dogecoin held an uptrend line in the 4-hour chart (DOGE/USDT), acting as a dynamic support level. This line has been touched without being breached three times since mid-November, with each touch resulting in a price rebound, indicating strong buyer interest.
Resistance is evident near the $0.47 mark, tested multiple times without a breakthrough. This repeated resistance testing suggests a consolidation phase, potentially setting the stage for a stronger upward move if market sentiment improves.
A significant reduction in open interest in stablecoin-margined contracts was observed, with $86.29 million in DOGE long positions liquidated on December 9, marking the highest liquidation since the 2021 bull run. This washout of speculative positions may indicate a market reset, allowing for a more sustainable upward movement.
The chart also shows a reset of funding rates to lower levels, which can reduce the cost of holding long positions and encourage new buying activity from previously sidelined participants.
Additionally, CRG noted that the Cumulative Volume Delta (CVD) for futures is below that of the spot market. This divergence implies that futures traders are adopting more bearish positions or closing existing ones more aggressively compared to spot traders, suggesting that the bullish sentiment in the spot market acts as a buffer against bearish trends in futures.
At press time, DOGE traded at $0.40.
