Source: WeChat Official Account: Niugulu Yao
Against the backdrop of a comprehensive recovery in the cryptocurrency market, Dogecoin (DOGE) has shown a significant increase.
DOGE rose by nearly 3% to $0.38, with daily trading volume surging by 18%, exceeding $40 billion.
As this upward trend emerges, the technical chart of DOGE shows a pattern similar to the explosive bull market before 2021.
Cryptocurrency analyst Ali Martinez pointed out that Dogecoin began its second uptrend around January 25, 2021, after falling 56% from the previous peak.
Similarly, after experiencing a 46% pullback in recent weeks, DOGE’s current trend indicates that it may be preparing for another significant breakthrough.
If historical patterns hold, Dogecoin’s next major rally could begin as early as next week, reigniting investors’ interest.
Data from CoinGlass further supports this bullish outlook, indicating a 6.3% increase in open interest contracts for DOGE, which has now exceeded $47.3 billion.
The surge in derivative trading indicates a strengthening market interest and lays the foundation for potential future returns of meme coins.
DOGE Price: Rising Interest and Social Media Buzz Drive Momentum
Dogecoin successfully held the key support level at $0.36 and broke through this resistance earlier this week.
With the inauguration of Donald Trump on January 20 approaching, speculative activities in the market are intensifying, which could provide additional momentum for Dogecoin.
The continued rise in retail interest and social media buzz, especially as concerns about macroeconomic risks begin to fade, further fuels the fire.
Dogecoin’s open interest contracts indicate growing confidence among traders
The remarkable increase in Dogecoin’s open interest contracts saw a new position increase of $570 million in the past three days.
As of January 16, the total open interest contracts for DOGE futures reached $47.3 billion, growing by 15%, surpassing the 10% increase in DOGE spot prices.
This suggests that leveraged traders are preparing for further upward momentum.
Compared to the price increase, the growth rate of open interest contracts is faster, indicating traders are confident in holding their positions, potentially paving the way for Dogecoin to break the $0.40 resistance level in the coming days.
What Does Dogecoin Need to Reach $3?
For Dogecoin to start a significant rally, it must first break through the direct resistance level at $0.40.
Successfully surpassing this level may further rise to $0.45, driven by long leveraged positions.
However, failing to maintain above $0.35 could expose DOGE to potential downside risks, such as profit-taking or liquidation of leveraged positions.
Some analysts compare Dogecoin’s past performance with historical trends, suggesting that if the current trend mirrors the bull market of 2021, Dogecoin could quickly rise to $3.
With the market’s close attention, Dogecoin’s next steps may set the foundation for the upcoming weeks, potentially leading to a tenfold increase in price and reigniting investors’ enthusiasm.