Analyst Says It Looks ‘Incredible’
The cryptocurrency market has witnessed The largest leveraged exit since April 2021 yesterday, December 9, as reported earlier today. Amid the market turmoil, Dogecoin (DOGE) is one of the altcoins showing clear signs of strength. in a postal On X, crypto analyst CRG (@MacroCRG) believes that DOGE price is showing “incredible” signs of resilience compared to the broader altcoin market.
Here’s Why Dogecoin Looks “Incredible”
Despite the market downturn, Dogecoin managed to hold on to the most critical support level. CRG shared the chart below and commented: “DOGE looks incredible. The whole market collapsed, but it barely held back + didn’t break the structure. Funding has now completely reset and a lot of OI has been wiped out. In my opinion, It won’t be long before things get tough again.”
The chart reveals several key insights that support his optimistic outlook for DOGE. First, Dogecoin maintained a key uptrend line on the 4-hour chart (DOGE/USDT). This trendline acts as a dynamic support level, which Dogecoin price has touched three times since mid-November but failed to fall below this level.
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Each time this trendline is hit, it triggers a rebound in Dogecoin price, indicating Buyers are interested at these levels. Consistency with the uptrend line is crucial because not only does it indicate support, but investor confidence grows every time the price falls to that line and subsequently recovers.
On the other hand, resistance formed near the $0.47 mark. This level has been tested multiple times and every attempt to breakout has been met with resistance. Repeated tests of this resistance level without a breakout may often indicate a consolidation phase that could lead to a consolidation phase. Stronger upward movement If market sentiment changes positively.
Additionally, the chart shows a significant decrease in open interest for stablecoin margin contracts. According to Coingras dataOn December 9, $86.29 million in DOGE long positions were liquidated, the highest level since the 2021 bull run.
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The reduction in open interest represents a significant “washout” of speculative positions and is often viewed as a market reset, with weak players exiting and excess leverage reduced. Notably, this clearing out of market participants could be another sign that a more sustainable uptrend is brewing.
Another important aspect shown in the chart is resetting the funding rate to a lower level, which is important because it reduces the cost of holding a long position. Lower financing rates can encourage new buying activity, especially among players who have previously been marginalized by the high costs associated with maintaining leveraged positions.
CRG’s analysis also includes observations of cumulative volume delta (CVD) in futures and spot markets. The CVD of futures has been lower than that of the spot market, indicating that futures traders may be taking more bearish positions or being more aggressive in closing existing positions compared to spot traders. This divergence suggests that the typically less speculative cash market remains bullish while acting as a buffer for the bearish futures market.
At press time, DOGE was trading at $0.40.
Featured image created using DALL.E, chart from TradingView.com
