The price of Dogecoin experienced a decline amid a downturn in the market. This happened on Tuesday due to the problems surrounding Binance. Despite the recent downward trend in Dogecoin’s value, bullish sentiment remains among its investors. They are currently facing losses but remain hopeful about a possible recovery as evidenced by their activities in the derivatives markets and the trends observed in the Dogecoin price chart.
DOGE’s active addresses increased after the price drop
Dogecoin has delivered huge profits to its investors by rising 50% in four weeks, but the company is now approaching the point of losing these gains. About a third of the revenue realized by DOGE investors has been wiped out, and the memecoin is expected to fall further.
As the market has now recovered somewhat from the recent dip, short positions worth almost $700,000 were liquidated. This suggests that buyers increasingly accumulated the memecoin around the dip.
Even with a significant number of liquidations, traders appear stronger. The positive funding rate suggests that there are currently more long contracts than short contracts for Dogecoin. This positive funding rate indicates that a greater number of traders are opting for long positions as they expect a price increase in the coming hours. If the price of Dogecoin follows the expectations of its traders, a downturn can be avoided. However, if that is not the case, further losses may arise.
According to information from IntoTheBlock, there is an increasing trend in the number of active addresses in the Dogecoin market as it exceeded 100K, indicating a growing inflow of capital. This trend has helped strengthen the immediate level of support for Dogecoin.
What’s next for the DOGE Prize?
The value of Dogecoin continued to decline and recently reached a low of $0.07, a crucial support line. However, aggressive buying demand near this low prevented the price from falling further as DOGE price quickly recovered from this low. This suggests that price declines are opportunities for accumulation. At the time of writing, DOGE price is trading at $0.075, up over 0.9% from yesterday’s price.
Currently, there are attempts by the bulls to push the Dogecoin price above the 20-day EMA on the 4-hour price chart. Success in this step would indicate a strong trend of continuous buying. After this, the bulls could try to overcome the resistance at $0.087, aiming to continue towards $0.10.
On the other hand, the bears may try to take advantage of any price increases to keep Dogecoin below the 20-day EMA. Sellers are active around $0.08 and Dogecoin’s rise above that level could witness strong selling and a rise in short positions. Should this happen, it could pave the way for a further decline towards the 100-day Exponential Moving Average (EMA) at $0.68 and possibly to a critical support level at $0.058.