Source: Official Account: Niu Gu Lu Yao
Against the backdrop of a comprehensive recovery in the cryptocurrency market, Dogecoin (DOGE) has shown a significant increase.
DOGE rose nearly 3% to $0.38, with a daily trading volume surging by 18% to over $4 billion.
This upward trend comes as DOGE’s technical chart shows a pattern similar to the explosive bull market in 2021.
Cryptocurrency analyst Ali Martinez pointed out that after a 56% drop from the previous peak, Dogecoin began its second uptrend around January 25, 2021.
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 true, Dogecoin’s next major rally could start as early as next week, reigniting investor interest.
Data from CoinGlass further supports this bullish outlook, indicating a 6.3% increase in open interest for DOGE, surpassing $4.73 billion.
The surge in derivative trading indicates increased market interest and lays the foundation for potential future gains for meme coins.
DOGE Price: Rising Interest and Social Media Buzz Boost Momentum
Dogecoin successfully held the key support level at $0.36 and broke through this resistance earlier this week.
With Donald Trump’s inauguration ceremony approaching on January 20, speculative activities in the market are intensifying, which may provide additional boost to Dogecoin.
The continuous increase in retail interest and social media hype is further fueling the fire, especially as concerns about macroeconomic risks begin to fade.
Dogecoin’s open interest suggests growing trader confidence
The staggering increase in Dogecoin’s open interest has added $570 million in new positions over the past three days.
As of January 16, the total open interest for DOGE futures reached $4.73 billion, a 15% increase, surpassing the 10% rise in DOGE spot prices.
This indicates that leveraged traders are preparing for further upward momentum.
Compared to the price increase, the growth rate of open interest is faster, indicating that traders have confidence in holding their positions, which may pave the way for Dogecoin to break through the $0.40 resistance level in the coming days.
What is needed for Dogecoin to reach $3?
For Dogecoin to start a significant rally, it must first break through the immediate resistance level at $0.40.
A successful breakthrough at this level could further push the price up to $0.45, driven by leveraged long positions.
However, failure to maintain above $0.35 may expose DOGE to potential bearish risks, such as profit-taking or liquidation of leveraged positions.
Some analysts compare Dogecoin’s past performance to historical patterns and believe that if the current trend is similar to the bull market in 2021, Dogecoin could soon rise to $3.
With the market closely watching, Dogecoin’s next move may lay the foundation for the next few weeks, with the potential for a 10-fold price increase, reigniting investor enthusiasm.
