- DOGE recovered +30% and could unlock another 18%
- Investors have reduced the risk of DOGE, putting the price under greater pressure
Dogecoin (DOGE) The price has been under significant pressure after hitting its yearly high of $0.22 in March. In fact, the recent market crash pushed it to its low of $0.8 in early 2024, losing another 40% on the charts.
However, like the rest of the market, DOGE’s recovery was worth over 30%. It reclaimed a crucial resistance and a middle level of its falling channel pattern. Hence the question: are additional recovery gains ahead for the bulls?
Can DOGE’s rally continue?
Source: DOGE/USDT, TradingView
DOGE bulls strongly defended the channel low at $0.8 as shown by the long wick of the candlestick, but at the time of writing, the key market advantage for an extended recovery lay in flipping and defending the mid-range as support.
At press time, the mid-range had been reclaimed and defended. This could prompt DOGE to set its sights on the next bullish target and the range high at $0.12. Such a move could add 18% gains to the recovery.
However, key price chart indicators did not support the above-mentioned optimistic thesis, at least not at press time.
Historically, when DOGE has risen above the mid-range, demand, indicated by the RSI (Relative Strength Index), and inflows, highlighted by the CMF (Chaikin Money Flow), have always been above or near the average.
An additional pump would only make sense if demand and inflows also increased sharply.
DOGE: Investors reduce risks in the face of increasing outflows
According to Coinglass data, DOGE has seen $60 million in outflows so far this week after investors turned risk-averse during the recent disaster. However, outflows tapered off towards the end of the week, suggesting a trend reversal is likely.
Source: Coinglass
However, it might take a little longer to achieve a stronger price uptrend that could help DOGE overcome its overall downtrend.
The weak momentum was likely due to declining open interest (OI) rates.
To read Dogecoin Price Prediction 2024–2025
DOGE’s OI fell from its March peak of over $2 billion to under $500 million at press time, highlighting a lack of liquidity injections on the derivatives front to boost the memecoin and reverse its downtrend.
Source: Coinglass
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and reflects solely the opinion of the author.
