Dogecoin Heads Towards Reversal as $0.50 Liquidity Wall Attracts Price Rise

Dogecoin (DOGE) is approaching an important technical setup that could determine its next move. Alphractal's liquidation heat map shows a large liquidity pool near the $0.50 level, worth over $380 million.

This level was formed during the previous price increase of DOGE and reflects the concentration of short positions. If selling pressure weakens, analysts suggest that these short orders could drive a breakout. Historical data shows that similar setups have occurred before major price increases of DOGE. Before the most recent price surge, DOGE consolidated near its lows before making a strong upward move. The current chart reflects that formation, indicating a potential reversal. A breakthrough through this liquidity pool wall could lead to new bullish activity, especially if upward momentum exceeds the $0.50 mark. The DOGE/BTC Ratio and the Memecoin Area Show Divergence DOGE/BTC is approaching an important support zone, similar to the pattern seen before the price surge in 2021. Alphractal notes that the accumulated liquidation levels are still heavily skewed towards short positions, increasing the likelihood of a price reversal.

The broader memecoin sector is showing mixed performance. The memecoin index has recovered, currently exceeding its market value from 2021, but open interest remains capped at $3.2 billion. The daily trading volume for memecoins is only $12 billion, much lower than that of Bitcoin or Ethereum. The comparison chart shows that BTCUSDT outperforms the memecoin index, with an increasingly widening divergence since the beginning of this year. Despite this poor performance, analysts believe that memecoins could regain momentum if Bitcoin continues to rise. Historically, BTC's bullish cycles often trigger speculative rallies in low-cap assets like DOGE. The technical structure indicates the potential for price increase of the Elliott wave. DOGE is holding the long-standing support zone highlighted in green, serving as a consolidation area since 2021. The current price structure aligns with a potential Elliott wave pattern. According to the analysis, DOGE may be completing Wave 4, with Wave 5 likely targeting higher levels.

Support indicators include the 50-week and 200-week moving averages, both aligned with the current price. Momentum indicators like MACD indicate that bullish strength may be returning, although confirmation is needed. Since the end of 2022, DOGE has formed higher lows, reflecting gradual accumulation. A strong recovery from the support zone could confirm this technical setup. Analysts point out that as long as DOGE remains above this zone, it can continue to rise higher. If confirmed, the next phase could challenge the liquidity level of $0.50 and initiate a broader trend reversal. Dogecoin is at a technical crossroads, with an increase in short interest and important support levels converging. While memecoins lag behind significant cryptocurrency assets, the historical structure and behavior of DOGE indicate that a breakout may still be possible.