Dogecoin (DOGE) Pulls Back from Multi-Month Highs
Dogecoin (DOGE) has experienced a sharp pullback from its multi-month highs reached on Monday at $0.1075. This decline is attributed to a flushing out of excessive bullish leverage that had accumulated during the cryptocurrency’s recent upward push.
Currently, DOGE is trading around $0.0940, marking a decrease of over 12% from Monday’s highs. This drop is accompanied by a wave of liquidations of long positions in the futures market.
On Monday, leveraged long futures positions worth over $9 million were liquidated, making it the largest amount in a single day in at least three months.
The open interest-weighted funding rate for leveraged futures positions has also decreased from its multi-month highs earlier this month and is currently around 0.0233%.
While the latest liquidation event has dampened the demand for new long futures positions, the market’s bias remains bullish as the funding rate remains positive.
A Positive Reset for Dogecoin Market
The recent correction in the Dogecoin market may be seen as a positive reset. The flushing out of overly-leveraged and weak-handed bulls creates an opportunity for longer-term bulls with a higher tolerance for price volatility to add to their positions.
This influx of stronger buyers forms a more solid base for sustained upside in the DOGE price, as they are less likely to take profit or panic sell during short-term price declines.
Price Prediction – Short-term Decline but Long-term Upside Potential
In the short term, Dogecoin’s price may continue to decline as the broader market trades with a downside bias due to recent US economic data. However, dip buyers are expected to enter the market as the consensus is that we are in a new bull market cycle.
A good area of price support for DOGE is around $0.0875, where the 21DMA and November high coincide. Medium-term price predictions remain bullish, with the potential for a pump back to late 2022 highs in the $0.16 area if DOGE can break above resistance in the mid-$0.10s.
Consider Diversifying with Meme Kombat ($MK)
While Dogecoin offers upside prospects, diversifying crypto holdings is always recommended. One alternative to consider is Meme Kombat ($MK), a promising web3 project that combines crypto gaming and gambling.
Meme Kombat allows users to bet on battles between characters based on popular meme coins. Early investors in $MK can also benefit from generous staking rewards, currently exceeding 100% annually.
The project has already raised close to $2.8 million since its launch a few weeks ago.
Hot Take: Market Resetting for Dogecoin
Dogecoin’s recent pullback and liquidation of excessive bullish positions indicate a market reset. This correction provides an opportunity for stronger buyers to enter and support the DOGE price for sustained upside potential. While short-term declines may occur, the broader consensus is that we are in a new bull market cycle, with medium-term price predictions remaining bullish. Additionally, considering diversification with projects like Meme Kombat ($MK) can offer alternative investment opportunities in the crypto space.
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