Here’s Why Dogecoin Is Poised For A Major Bullish Reversal
Dogecoin (DOGE) price appears poised for a major bullish reversal on the back of technical indicators and sentiment data. Despite recent downward pressure, several factors point to a potential upward trajectory for the popular meme coin.
#1 Dogecoin bounces off key support (1D Chart)
Cryptocurrency analyst CRG (@MacroCRG) highlighted the resilience of Dogecoin and another well-known memecoin, PEPE, saying: “DOGE + PEPE have both bounced back from significant territory. In my opinion, the demise of memecoins has been grossly exaggerated ” What’s next is going to surprise a lot of people.”
Technical analysis from CRG shows that despite heavy selling pressure, DOGE has maintained daily closing prices above the key support level of $0.385 for the ninth consecutive day. Likewise, PEPE continues critical supportsuggesting that “meme coin season” may be about to make a comeback.
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The short-term resistance zone at $0.42 remains a key level for Dogecoin. Breaking that threshold could signal the start of a new bull market, which could catch many investors off guard, CRG said.
#2 Bullish Market Structure (4 Hourly Chart)
Further technical insight comes from cryptocurrency analyst Gonzo (@GonzoXBT), who provides technical analysis of Dogecoin price action. Gonzo explained, “DOGE 4H EMA100 -> as resistance 4H EMA200 -> as support. We will just cut between the two before we flip 4H EMA100, but don’t want to see it lose 4H EMA200.”
This analysis highlights the importance of the 4-hour exponential moving average (EMA) in determining short-term price action. Currently, 4H EMA100 serves as resistance and 4H EMA200 provides support. A sustained break above the 4-hour EMA100 could prompt a breakout to the upside, while failure to sustain above the 4-hour EMA200 could lead to further consolidation or declines.
#3 Trade Against the Trend
Cryptocurrency analyst Ali Martinez (@ali_charts) offers another bullish view on DOGE’s near-term prospects. He noted that “market sentiment for Dogecoin has turn negative. It seems traders are getting impatient during the ongoing price consolidation! “
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Martinez’s analysis based on Santiment data shows a sharp decline in both search volume and weighted sentiment. Specifically, weighted sentiment has fallen to its lowest point since mid-October, while search volume has also fallen to its lowest level since early November.
Martinez speculated on potential catalysts that could quickly reignite Dogecoin’s positive momentum, mentioning a new U.S. Department of Government Effectiveness uUnder the leadership of Elon Musk. “Or you could wait for the first mass action from the Department of Government Effectiveness,” he suggested.
#4 Liquidation dynamics indicate potential upside
Cryptocurrency analyst Carlos Garcia Tapia (@CAGThe3rd) adds another layer to the bullish argument shared Insight into the liquidation heat map of the past three days and commented: “FOMO bulls just got liquidated on the 3D chart. Governor.”
Coinglass’ heat map shows significant liquidation of leveraged long positions over the past two days, concentrated between $0.393 and $0.385. But there is a bullish warning: with most longs now liquidated, the remaining liquidation cluster is around the $0.42 mark.
This setup suggests that Dogecoin may form a bullish candle, potentially triggering further liquidation of bearish positions and driving the price higher. Why? Liquidation heatmaps are valuable tools for predicting price movements as they reflect underlying market liquidity and leverage dynamics.
These heat maps highlight where traders are most vulnerable to forced liquidations, creating psychological and technical barriers. When prices approach these levels, large market participants can influence price direction by triggering a series of liquidations, amplifying the resulting price movements.
At press time, DOGE was trading at $0.3843.
Featured image created using DALL.E, chart from TradingView.com
