The short liquidations seen in the last 24 hours are usually followed by a rally, which could be the case for the Dogecoin (DOGE) price this time around.
Dogecoin eyes a potential breakout, but will bears retreat?
The price of the popular memecoin Dogecoin has increased by 11% over the past 24 hours amid a general rally in the crypto market. However, this caused traders who were expecting the price to fall to lose their money. The total volume of short liquidations amounted to almost $7 million.
This is the largest one-day liquidation of short positions in the past two months. As history shows, after such large-scale liquidations, prices rose in the following days, which is expected this time as well. The bears may now retreat as investors await a rally.
Investor optimism is fueled by expected profits of $1.28 billion. Moreover, according to the Global In/Out of the Money (GIOM) indicator, approximately 7.87 billion DOGE tokens were purchased at prices ranging from $0.16 to $0.18.
These coins may become profitable in the near future as the Dogecoin price is showing bullish signs. However, this will require a breakout of the $0.16 resistance level. Meanwhile, It is likely that the anticipation of an imminent profit will encourage DOGE holders to push the altcoin higher until it reaches $0.18. This could potentially contribute to the rally.
DOGE Forecast: When the Growth Will Stop?
Over the past month, the Dogecoin price has been moving within an ascending triangle pattern. This is a bullish continuation pattern characterized by a horizontal resistance line and an ascending trend line. It indicates that buyers are gradually gaining strength, and this often leads to a breakout of the resistance level.
At the time of writing, DOGE is struggling to break out of this pattern, with trading volumes steadily declining. The pattern will be confirmed if the coin rises by 22% to $0.20. This critical price point is the target of this pattern and also acts as a key psychological level.
However, a more realistic outcome would be for the price to reach $0.18, which would bring the above-mentioned supply volume into the profitability zone.
On the other hand, failure to break through $0.16 could lead to a price pullback back into the pattern. This will indicate a false bullish breakout and could send Dogecoin towards $0.15 or lower. In this case, the positive scenario will be considered untenable.
