Assessing DOGE's Fate Amid Looming Liquidation Trends

In the midst of what could be considered a robust start to the week, Dogecoin (DOGE) faces challenges in maintaining its momentum. The surge in DOGE prices on January 20 led to significant short liquidations, totaling over US$3 million, alongside long liquidations of approximately US$460,000.

However, the subsequent days witnessed a shift in liquidation patterns, with long liquidations taking the lead.

Dogecoin Liquidation Trends

According to AMBCrypto's report, chart analysis reveals a consistent trend of long liquidations, reaching its peak on January 22 with over US$3.8 million. In contrast, short liquidations on the same day were in the range of US$353,000.

Dogecoin Liquidation Trend / source: Blockchainmedia.id

On January 23, long liquidations remained above US$2.7 million, while short liquidations dwindled to less than US$200,000.

This pattern indicates that traders speculating on DOGE's price increase incurred losses. As of the time of writing, the modest increase in DOGE prices triggered short liquidations of over US$180,000, while long liquidations were below US$20,000.

Assessing Bullish Trends

The daily timeframe chart for Dogecoin depicts a week filled with volatility. On January 20, DOGE experienced a significant 16.14% increase, propelling its price to US$0.09. However, in the following three days, it witnessed a nearly 15% decline.

Over the past two days, DOGE has seen a slight recovery with an increase of over 2%, reaching around US$0.700.

Examining the RSI indicator for DOGE, it is evident that this altcoin predominantly remains below the neutral zone throughout the year. Although briefly surpassing the neutral zone on January 20, it quickly returned below it, indicating a continuing bearish trend.

The price decline has caused DOGE to be below its short-term moving average (yellow line), acting as the nearest resistance at around US$0.8. This position under the yellow line emphasizes the current bearish trend.

Despite the recent slight price increase causing a temporary upward movement, DOGE remains below the neutral line on the RSI, signaling ongoing bearish sentiment among traders.

The Dogecoin price trend has witnessed a decrease in buyer aggression, as reflected in its Funding Rate on Coinglass. While still positive, its Funding Rate has experienced a decline over the past few weeks.

At the time of the latest update, there is a small increase in the Funding Rate, hovering around 0.01%, attributed to the observed upward trend in DOGE. This dynamic indicates that market participants remain cautious, and the crypto market is undergoing a phase of revaluation.

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