Is Dogecoin Getting Ready for a New Wave?

In the context of the cryptocurrency market undergoing a two-month prolonged correction, Dogecoin is still showing positive signs, despite downward price pressure. Strong activity from large investors and increased user engagement are opening up opportunities for a potential recovery. Positive Signs From Major Investors According to data from Santiment, the number of wallets holding at least one million DOGE has increased significantly recently. This indicates an accumulation trend from large investors, reflecting their confidence in the potential recovery of DOGE in the future.

In addition, the daily active address count of Dogecoin has also reached its highest level in four months, surpassing 150,000 addresses. This is a positive signal that the usage and acceptance of Dogecoin are increasing. Key Price Levels to Watch In addition to the accumulation of large investors, technical indicators are also suggesting that DOGE is at a crucial support area. According to cryptocurrency analyst Ali Martinez, Dogecoin is currently testing a crucial support area around the $0.167 level. This price level coincides with the Fibonacci retracement of 0.618 and the lower boundary of the ascending channel. History shows that DOGE often rebounds from these trendlines, opening up the opportunity for a strong recovery.

If the buying side can maintain this support level, Dogecoin could target $0.35 and even higher. Conversely, if the price breaks below this support area, DOGE could drop sharply towards $0.11, leading to a more negative outlook. Impact of Liquidity on DOGE Price Market liquidity also plays an important role in the price fluctuations of Dogecoin. Recent liquidation data shows that large liquidations of short orders often occur when DOGE rises, while liquidations of long orders are more common during price declines. Currently, the important liquidation levels of DOGE are around $43.14 million and $86.29 million. Monitoring these liquidation levels can help traders predict the next market movements.

Short-Term Trading Prospects When DOGE stabilizes around $0.30, the liquidity is more balanced between long and short positions. This indicates that the market is forming a more stable trading range in the short term.

In terms of momentum, the Relative Strength Index (RSI)(RSI) is currently at 37.16, indicating that DOGE is approaching oversold territory. Although not completely in this zone yet, the RSI signal shows that buying pressure is gradually increasing. The (MACD) Convergence/Divergence Average indicator is still in a negative state, with the MACD line at 0.0020020 and the signal line at 0.0199476. However, the MACD histogram is showing signs of weakening selling pressure, suggesting a possible trend reversal. Conclusion Although DOGE has experienced downward pressure for the past two months, recent signs from the activities of large investors, increasing active addresses, and technical indicators are showing the potential for Dogecoin's recovery. If the support level of $0.167 is held, DOGE could aim for higher targets in the future. However, if the price drops below this level, Dogecoin could face a deeper decline. Investors need to closely monitor key support levels, liquidity data, and technical indicators to make appropriate trading decisions in line with market trends.