Dogecoin bounces back, return of memecoins? Crypto analysis of February 28, 2024

Dogecoin has started a new week up by more than 17%. Let’s take a look at the future prospects for DOGE’s price.

Dogecoin (DOGE) Situation

After failing to break through the resistance at $0.10, the Dogecoin price (DOGE) began a correction, falling to $0.075. At this price level, DOGE started a period of consolidation, forming a range that was ultimately broken upwards. It is noteworthy that this consolidation took place around the 61.8% Fibonacci retracement level from the last low, and coincided with the cost line of the previous trough. Finally, this price level, located in a value zone, highlights the significance of the $0.075 threshold.

Dogecoin is now above its 50 and 200-day moving averages, reinforcing the notion that DOGE is currently in an upward trend. The cryptocurrency’s momentum has significantly intensified, which is reflected by oscillators exceeding their median thresholds. Although this is generally perceived as positive, the RSI’s return to the overbought zone could signal the possibility of a short-term consolidation or correction.

The current technical analysis was conducted in collaboration with Elie FT, an enthusiastic investor and trader in the cryptocurrency market. Now an instructor at Family Trading, a community of thousands of proprietary traders active since 2017. There you will find live sessions, educational content, and mutual assistance with financial markets in a professional and warm atmosphere.

Focus on Derivatives (DOGEUSDT)

We can observe that the open interest in DOGE/USDT perpetual contracts has increased alongside its price, accompanied by a slightly positive funding rate. This simultaneous increase suggests that traders’ speculative interest is mainly oriented towards buying. Regarding liquidations, while subtle, they are predominantly in favor of buyers, demonstrating a seller capitulation.

The liquidation heatmap for the DOGE/USDT pair over the past three months shows that the cryptocurrency has recently reached a significant liquidation zone. So far, it appears that buyer interest persists, which is encouraging for a continuation of the bullish trend. However, the most significant liquidation zones are now below the current price, especially around $0.08. If the price approaches these levels, it could trigger orders massively, thereby increasing the risk of a period of heightened volatility for Dogecoin. This area therefore represents a critical point of interest for investors.

Scenarios for Dogecoin’s (DOGE) Price

• If the DOGE price maintains above $0.08, we could anticipate a continuation of the upward trend towards $0.10 – $0.11. If this level is broken through, the next bullish target could be $0.16. At this stage, it would represent an increase of over 60%.

• If Dogecoin’s price fails to hold above $0.08, we could consider a pullback towards the $0.075 range. In case of a continued downward movement, the next support level to consider would be around $0.065. At this level, the decline would represent approximately -35%.

Conclusion

Dogecoin appears to confirm buyer’s interest, which suggests a continuation of its upward trend. To consider a breakout of the $0.10 resistance, it is essential that the buyer’s interest persists. Therefore, it will be crucial to carefully observe the price reaction to various key levels to confirm or refute the current assumptions. It is also important to remain vigilant for potential “fake outs” and market “squeezes” in each scenario. Lastly, let’s remember that these analyses are based solely on technical criteria and that cryptocurrency prices can also move rapidly based on other more fundamental factors.