After consolidating within a pre-defined range, the Dogecoin price is showing early signs of recovery. The price has defended a key support zone near $0.071 as the buyers regained control following weeks of sustained selling pressure. The memecoin has rebounded toward a descending trendline, while momentum indicators are beginning to improve. This hints at a potential shift in short-term sentiment, while liquidation data reveals the possibility of a short squeeze.
Can the Dogecoin price break through the resistance and extend the current rebound toward $0.08?
Dogecoin Holds Key Support as Bulls Challenge Trendline Resistance
Dogecoin has rebounded after successfully defending the $0.071-$0.072 demand zone, a level that has repeatedly attracted buyers over the past few weeks. The daily chart shows DOGE bouncing from this support while attempting to break above a descending trendline that has capped every recovery since late June.
The Relative Strength Index (RSI) has climbed to around 45, recovering from oversold territory and pointing to improving buying momentum. However, the indicator remains below the neutral 50 mark, suggesting bulls still need stronger follow-through to confirm a sustained trend reversal. Besides, the Bollinger bands are showing signs of a contraction that usually results in significant price action, probably above the resistance of the band at $0.076.
Short Liquidation Cluster Signals Potential Upside Acceleration
Beyond the price chart, derivatives data also supports the possibility of a stronger recovery. According to CoinGlass’ 30-day liquidation map, a significant concentration of short liquidations is positioned between $0.075 and $0.081, well above DOGE’s current trading range. This suggests that many traders are betting on further downside, creating a potential fuel source for an upside move. At the same time, the liquidation map shows relatively fewer long liquidation clusters below the current price. This indicates that much of the downside liquidation pressure has already been absorbed.
If Dogecoin manages to break above the immediate resistance near $0.074, these leveraged short positions could begin to unwind, forcing traders to buy back their positions. Such a chain reaction, commonly known as a short squeeze, often amplifies bullish momentum and drives prices higher over a short period. As a result, a confirmed breakout above the descending trendline may encourage DOGE to target the $0.076-$0.081 liquidity zone in the near term.
Can DOGE Price Rally Toward $0.08?
Dogecoin’s near-term trajectory will likely depend on whether buyers can sustain the current recovery and reclaim key resistance levels. A decisive move above the immediate hurdle could attract fresh buying interest while also triggering the liquidation of leveraged short positions, potentially accelerating the upside move.
The first hurdle lies around $0.074-$0.076; a sustained close above this range would signal strengthening bullish momentum. On the downside, the $0.071 support remains the level to watch. Losing this zone would invalidate the current rebound setup and expose the meme coin to a deeper correction toward $0.069 or lower.
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