The price of Dogecoin experienced a decline amidst a downturn in the market. This happened due to the issues surrounding Binance on Tuesday. Despite the recent downward trend in Dogecoin’s value, there remains a bullish sentiment among its investors. They are currently facing losses but remain hopeful about a potential recovery, as indicated by their activities in derivative markets and the trends observed in the Dogecoin price chart.
DOGE’s Active Addresses Surged Following Price Dip
Dogecoin brought massive gains to its investors by surging 50% over four weeks, but it is now nearing the point of losing these profits. Approximately one-third of the earnings realized by DOGE investors have been erased, and the memecoin is expected to experience further decreases.
However, as the market has now slightly rebounded from its recent dip, nearly $700K worth of short positions were liquidated. This suggests that buyers increasingly accumulated the memecoin near the dip.
Even with a significant amount of liquidations, traders appear stronger. The positive funding rate suggests that, currently, there are more long contracts than short contracts for Dogecoin. This positive funding rate signals that a larger number of traders are opting for long positions, expecting an increase in the price in the coming hours. Therefore, if the price of Dogecoin follows the expectations of its traders, a downturn might be avoided. However, if it doesn’t, further losses could be there.
According to information from IntoTheBlock, there is an increasing trend in the number of active addresses in the Dogecoin market as it surpassed 100K, indicative of a growing influx of capital. This trend has contributed to strengthening the immediate support level for Dogecoin.
What’s Next For DOGE Price?
Dogecoin’s value continued to decline and it recently touched the low of $0.07, a crucial support line. However, aggressive buying demand near this low prevented the price from dropping further as DOGE price quickly rebounded from this low. This suggests that price dips are opportunities for accumulation. As of writing, DOGE price trades at $0.075, surging over 0.9% from yesterday’s rate.
Currently, there’s an effort by the bulls to push the Dogecoin price above the 20-day EMA on the 4-hour price chart. Success in this move would indicate a strong trend of continuous buying. Following this, the bulls might attempt to overcome the resistance at $0.087, aiming to progress toward $0.10.
On the other hand, the bears may attempt to capitalize on any price rallies to keep Dogecoin below the 20-day EMA. Sellers are active near the $0.08 mark and Dogecoin’s surge above that level might witness a strong selling and a surge in short-positions. Should this happen, it could pave the way for a further decline to the 100-day Exponential Moving Average (EMA) at $0.68 and potentially to a critical support level at $0.058.