The price of Dogecoin has seen a decline amid a market slowdown. This happened due to the issues surrounding Binance on Tuesday. Despite the recent downward trend in Dogecoin’s value, bullish sentiment remains among its investors. They are currently facing losses but remain hopeful for an eventual recovery, as indicated by their derivatives market activities and trends seen in the Dogecoin price chart.
DOGE active addresses increased after price drop
Dogecoin brought massive gains to its investors by surging 50% in four weeks, but it is now on the verge of losing those profits. About a third of the profits made by DOGE investors have been wiped out and the memecoin is expected to see further declines.
However, as the market rebounded slightly from its recent decline, nearly $700,000 of short positions were liquidated. This suggests that buyers are increasingly accumulating memecoins near the decline.
Even with a significant number of liquidations, traders appear stronger. The positive funding rate suggests that there are more long contracts than short contracts for Dogecoin currently. This positive funding rate indicates that more traders are going long, expecting prices to increase in the coming hours. Therefore, if Dogecoin price follows the expectations of its traders, a downturn could be avoided. However, if this is not the case, additional losses could occur.
According to information from IntoTheBlock, there is an upward trend in the number of active addresses on the Dogecoin market, exceeding 100,000, indicating an increasing inflow of capital. This trend helped strengthen the immediate support level for Dogecoin.
What’s next for DOGE price?
Dogecoin’s value continued to decline and recently touched the 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 rebounded from this low. This suggests that price declines are opportunities for accumulation. At the time of writing, the DOGE price is trading at $0.075, up more than 0.9% from yesterday’s rate.
Currently, bulls are working to push Dogecoin price above the 20-day EMA on the 4-hour price chart. The success of this approach would indicate a strong tendency towards continued purchasing. Following this, the bulls could attempt to overcome the resistance at $0.087, aiming to advance towards $0.10.
On the other hand, bears could attempt to capitalize on any price rise to keep Dogecoin below the 20-day EMA. Sellers are active near the $0.08 mark and Dogecoin’s rise above this level could lead to heavy selling and increased short positions. If this happens, it could pave the way for a further decline to the 100-day exponential moving average (EMA) at $0.68 and potentially a critical support level at $0.058.