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Dogecoin dips 16% in a week, yet a $0.25 rally could be loading – HOW?

2min Read

Dogecoin faces low liquidity but rising accumulation and derivatives activity may fuel a potential rally.

Dogecoin [DOGE] drops 16% – But is a $0.25 rally now loading?
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  • DOGE, despite ranking high in market capitalization, has attracted the lowest liquidity among top memecoins.
  • Analysis showed that DOGE could reach new heights, as technical indicators point to a potential breakout.

Dogecoin [DOGE] declined by 16.23% in the past week, marking a significant drawdown for investors.

However, analysis suggests that DOGE may resume a bullish move this week, with the asset trending upward as both spot accumulation and derivative long bets increase simultaneously.

Low liquidity puts DOGE behind

CoinMarketCap’s 90-day performance index shows that among the leading memecoins by market capitalization, Dogecoin has attracted the least liquidity, despite holding a $28.6 billion market cap.

As of writing, DOGE has gained only 0.04% in the past ninety days. In contrast, FARTCOIN, with a $1.11 billion market cap, has surged by 368% over the same period.

Source: CoinMarketCap

Despite this underperformance, market analysis indicates that DOGE could be gearing up for a rally.

On the daily timeframe, Dogecoin has traded into a critical level—an ascending support line.

This zone could act as a catalyst for a major price move, with a target set at $0.25, representing a 33% rally from the current price level.

Source: TradingView

However, if DOGE fails to build sufficient momentum, the price could reverse and retest the origin of the ascending pattern near $0.14.

Retail traders are taking sides

Retail traders have begun taking positions in the derivatives market, with a noticeable uptick in long bets.

At press time, the Long/Short Ratio stood at 1.01, signaling a tilt toward bullish sentiment. A ratio above 1 implies higher buying volume than selling volume, which strengthens the case for a rally.

Source: CoinGlass

A close examination of Open Interest (OI) in both options and futures contracts shows a steady rise. OI represents the total value of unsettled derivative contracts within a specific period.

At the time of writing, OI in the Futures market has reached $2.06 billion, while the options market stands at $347,000. Sustained growth in OI alongside increasing buy volume suggests that DOGE may continue climbing.

DOGE could see more inflows

In the past 24 hours, DOGE has seen notable inflows, with $4.77 million worth of tokens moved into private wallets by spot traders.

Source: CoinGlass

When a large amount of tokens moves off exchanges and into private wallets, it typically indicates accumulation in anticipation of a long-term rally.

This also implies that the tokens are less likely to return to the market for sale. If such inflows continue, DOGE could trend toward the $0.25 target outlined on the chart.

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Olayiwola Dolapo is a Crypto Research Analyst at AMBCrypto, driven by a mission to make the digital asset space more transparent and understandable for all. His journey was catalyzed by an early experience in the market that underscored the importance of deep, foundational knowledge—a principle that now guides his professional work. His expertise is grounded in a Bachelor's degree in Chemistry. However, he also has a strong interest in economics which provides him with a strong framework for analyzing market behavior and the financial principles of blockchain technology. He combines this economic perspective with a specialization in technical analysis and on-chain data interpretation. This dual approach allows him to dissect price trends while also evaluating the underlying health and activity of a network. At AMBCrypto, Dolapo is dedicated to producing data-driven, educational content. He meticulously uses on-chain tools and technical charting to identify and explain emerging opportunities, helping readers move beyond hype and make decisions based on robust analysis. His work is a testament to his commitment to helping others navigate the complexities of the crypto market with clarity and confidence.
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