Dogecoin (DOGE) Price Primed for Gains as Short Liquidations Trigger Recovery

Dogecoin Poised for Gains as Price Surge Triggers Market Recovery

Dogecoin (DOGE), the renowned meme coin, is positioned for potential appreciation following a recent price increase that has sparked a market recovery. The significant short liquidations witnessed in the past 24 hours have historically been accompanied by price increases, suggesting a similar pattern this time.

Short Liquidations Signal Bearish Retreat

Dogecoin's price has witnessed an 11% surge over the past day, mirroring the broader crypto market rally, elevating it to a trading value of $0.163. This price action has resulted in short liquidations amounting to nearly $7 million, indicating losses for traders who anticipated a price decline.

This represents the most substantial single-day short liquidation in over two months. Historically, such liquidations have been followed by price increases in subsequent days, and the current scenario is expected to yield a similar outcome. The liquidations may also lead to a bearish retreat as investors anticipate a potential rally.

Bullish Indicators Foster Optimism

Investors' optimism is further bolstered by the prospect of $1.28 billion in profits, as indicated by the Global In/Out of the Money (GIOM) indicator. According to the data, approximately 7.87 billion DOGE were purchased between $0.16 and $0.18.

This supply could soon become profitable as Dogecoin's price exhibits bullish signals. However, for this to materialize, DOGE must overcome the $0.16 resistance level. Given the proximity of DOGE holders to realizing substantial profits, they are likely to remain engaged until the altcoin reaches $0.18.

Dogecoin Price Prediction: Assessing the Potential Upside

Over the past month, Dogecoin's price has been contained within an ascending triangle pattern. This bullish continuation pattern consists of a horizontal resistance line and an upward-sloping trendline, suggesting a gradual increase in buyer strength that often culminates in a breakout above the resistance level.

At the time of writing, DOGE is breaking out of this pattern, despite declining volumes. This critical price point has been identified as a target based on the pattern and also serves as a key psychological support level.

A more favorable outcome would be for Dogecoin's price to exceed $0.18, which would render the aforementioned supply profitable.

Conversely, an inability to penetrate the $0.16 resistance could lead to a reversal into the pattern. This would invalidate the breakout, potentially sending DOGE below $0.15, undermining the bullish thesis.