Dogecoin remains strong despite massive liquidation: Here’s why

As a researcher with extensive experience in the crypto market, I have closely followed Dogecoin’s (DOGE) performance over the past few weeks. The market sentiment for DOGE has remained positive, with analysts predicting a bullish run despite the increased volatility that has affected the entire crypto market. However, DOGE has experienced significant liquidation in recent days, with massive long positions being liquidated, resulting in a decline of 8.61% over the last seven days.

Over the past two weeks, I’ve observed significant fluctuations in the cryptocurrency market. Following Bitcoin‘s [BTC] peak at $71,000 and subsequent drop to $64,000, altcoins have taken a heavy toll.

Dogecoin [DOGE], the leading meme-coin, has equally suffered from the current market conditions.

Over the past week, DOGE experienced a decrease of 8.61%, and its price dropped further by 0.15% within the last 24 hours. According to CoinMarketCap, there was a significant drop in trading volume amounting to 31.99%, reaching $323 million. However, DOGE’s market capitalization saw a slight increase of 0.20% within the same period.

Leading crypto analysts are expressing different perspectives on the current market situation, with many voicing their optimism regarding Dogecoin’s potential future growth despite the ongoing market instability and consistent upward trend.

During the 18th and 19th of June, Coinglass reported massive sell-offs for DOGE, resulting in the liquidation of approximately 44 million and 18 million long positions.

This whale activity did not go unnoticed, with @sinceredoge sharing about it on X. He noted,

As a Dogecoin investor, I’ve witnessed a substantial liquidation event unfold. Long positions worth an impressive $60 million were forcedly closed during this market turbulence.

Despite the massive liquidation news, @sinceredoge shared optimism, arguing,

As a crypto investor, I believe there’s merit in maintaining optimism regarding Dogecoin. Certain market analysts project that the value of this cryptocurrency may peak at around $0.52 by the year 2024.

Another notable analyst, @Trader Tardigrade, shared on X that,

As a researcher looking into historical price data, I’ve discovered an intriguing pattern. In October 2023, the Relative Strength Index (RSI) of Dogecoin was at around 30. At that time, its value was under $0.06. However, within the following period, Dogecoin experienced significant growth, reaching a price of approximately $0.22 – marking an impressive over 300% increase from its previous low.

As an analyst, I’ve examined Doge’s historical price trends and discovered an intriguing pattern. Specifically, when Doge reaches the oversold territory, it typically undergoes a prolonged shift back into an uptrend.

What DOGE’s fundamentals tell us

As a crypto investor, I believe based on the above analysis that Dogecoin (Doge) is poised for a significant price surge in the imminent period. Consequently, considering this information, it seems like an opportune moment to make a purchase and potentially reap substantial returns.

Importantly, various metrics and indicators showed a potential change in pattern.

Dogecoin remains strong despite massive liquidation: Here’s why

Dogecoin has been exhibiting a significant downtrend, yet technical signs suggest a possible reversal. For example, the Relative Strength Index (RSI) stands at 33, while its moving average based on the RSI is 35.

Over the past two days, I’ve noticed the Relative Strength Index (RSI) trending upwards and showing potential to surpass its moving average (MA). With the RSI currently in the oversold territory, this could be a sign of an opportune moment for buying as the market may reverse due to accumulating demand.

The RSI was closing into its MA at press time, which was a bullish trend.

Dogecoin remains strong despite massive liquidation: Here’s why

Additionally, when the price line rested below the lower Bollinger Band, it indicated the conclusion of a declining trend and hinted at the onset of an upward trend reversal.

Instead, the affordable prices in the lower price range indicated a potential bargain, foreshadowing a future price hike.

Significantly, DOGE has entered a period of consolidation starting from the 19th of June. Lately, over the past five days, the price has hovered around the $0.124 mark.

When the prices are nearly at the same level as the daily moving average, it indicates that a favorable market occurrence could lead to increased demand to purchase, consequently pushing prices upwards.

Based on the data from Coinglass, AMBcrypto’s investigation reveals a decrease in long position liquidations over the past three days.

Starting from June 19th, large investors, or “whales,” have significantly scaled back their Dogecoin trading activities. Specifically, their net short positions amounted to approximately $18 million at that time. Currently, their total position size hovers around $9,260.

In simpler terms, fewer liquidations imply that long positions aren’t being closed down, and fresh opportunities are emerging for opening short positions.

According to AMBCrypto’s assessment of Santiment, there has been a rise in the number of cryptocurrency whales holding over $5 million worth of assets. Specifically, from June 19th following the liquidation event, the total supply held by these large investors has grown from $52.5 million to $53.7 million.

Trust in upcoming market changes was reflected in greater hoarding of assets, with the intention to capitalize on potential price increases by selling later.

DOGE: Bulls vs. bears

If the optimistic market feelings persist and Dogecoin maintains its current support at approximately $0.123, it is likely to encounter resistance around the $0.152 mark.

As a Dogecoin investor, I believe that surpassing the current resistance level could lead Dogecoin to hit $0.172. But, if this support level gives way, we might see Dogecoin sliding down to $0.1135 instead.

2024-06-24 10:16

What DOGE’s fundamentals tell us

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