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Key Takeaways:
- DOGE broke above a multi-month resistance and must hold $0.19 for the breakout to be validated.
- Funding rates and open interest are rising, signaling growing bullish sentiment in the derivatives market.
- Heavy long positioning adds risk, suggesting DOGE must maintain momentum to avoid sharp reversals.
Dogecoin [DOGE] has surged past a key descending trendline, hinting at a possible long-term trend reversal. After months of lower highs, the meme coin has finally posted a weekly close above the critical resistance level that has capped price action since December 2023.
To maintain this bullish momentum, DOGE must hold above $0.19 and establish a higher low, with the next key target sitting at the $0.22 zone.
Funding Rates and Open Interest Signal Bullish Conviction
DOGE’s on-chain and derivatives data paint a promising picture. The OI-Weighted Funding Rate has flipped notably positive, sitting at 0.0163%—a sign that long traders are now paying a premium to keep their positions open. This shift typically indicates growing bullish conviction among perpetual traders.
Simultaneously, Open Interest (OI) has jumped by 14.03% to $3.12 billion. This surge suggests a fresh wave of capital is flowing into Dogecoin’s Futures market, backing the idea that traders are increasingly confident about higher prices.
Exchange Outflows Suggest Investor Confidence
Spot exchange data adds another layer of bullish confirmation. A net outflow of $3.70 million in DOGE indicates that holders are pulling their assets off centralized platforms—often a precursor to accumulation phases.
Such behavior suggests that long-term investors are becoming more confident, opting for self-custody and reducing sell pressure in the open market. If this trend persists, it could contribute to a supply squeeze, further supporting upward price action.
Overleveraged Longs Could Trigger Volatility
Despite the positive indicators, there are warning signs. On Binance, 73.78% of DOGEUSDT traders are long, pushing the Long/Short Ratio to an elevated 2.81. While this shows overwhelming optimism, it also introduces risk.
An overabundance of long positions often leads to liquidations if price retraces, potentially triggering a cascade of selling. For the rally to continue, DOGE must maintain strong momentum and avoid sharp pullbacks that could unsettle leveraged traders.
Also Read: Bit Origin Secures $500 Million Equity and Debt Facilities to Launch Dogecoin Treasury
Dogecoin appears to be in the early stages of a trend reversal, with technical and on-chain indicators aligning in the bulls’ favor. The breakout above the descending resistance, rising open interest, positive funding rates, and consistent exchange outflows all signal strength.
However, the growing dominance of long positions means any loss of momentum could lead to short-term volatility. For a sustained move higher, DOGE must hold above $0.19 and target a decisive breakout past $0.22.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
