- Dogecoin is flashing a TD Sequential buy signal near key support, hinting at a potential rebound if bulls can regain momentum.
- However, high leverage, weak inflows, and rising long liquidations threaten to derail any breakout attempt.
TD Sequential Signal Sparks Hope — But Risks Loom Large
Dogecoin (DOGE) has flashed a TD Sequential buy signal on the hourly chart, a potentially bullish indicator hinting at a short-term rebound. This signal emerged just as DOGE consolidated around $0.222, a critical support level within the familiar $0.21–$0.26 trading range. Historically, similar setups near range bottoms have preceded reversals—but this time, the backdrop is more complex.
Leverage Frenzy: Bulls Walk a Tightrope
On Binance, a massive 74.44% of DOGE traders are holding long positions, pushing the Long/Short Ratio to an overheated 2.91. While this reflects strong bullish conviction, it also exposes the market to sudden downside risks. If prices don’t rally convincingly, these overleveraged positions could quickly unwind, triggering cascading long liquidations that would erase any early gains.
Spot Inflows Weak, Liquidation Risks Rising
DOGE recorded $60.89M in spot inflows during a key hourly candle—but outflows slightly outweighed them at $65.69M, resulting in a net outflow of $4.8M. This modest buying pressure falls short of what’s typically seen in strong bullish phases. Compounding the issue, $1.99M in long positions were liquidated, compared to just $88K in short liquidations, signaling that bulls are currently losing the battle.
Speculative Activity Surges, But Confidence Wanes
Derivatives volume climbed 6.86% to $3.22B, and options activity soared over 32%, underscoring rising speculative interest. However, Open Interest dropped 2.86%, suggesting traders are either booking profits or losing conviction. This divergence between volume and commitment adds to market indecision and short-term volatility.
What Must Happen for DOGE to Break Out
Dogecoin currently trades at $0.2227 after a 2.36% daily drop. The RSI sits at 42.44, indicating weak momentum but no clear oversold conditions. For a real breakout, Dogecoin must close above $0.23 and push toward the $0.25 resistance. Without a strong volume surge and a reduction in leveraged positions, any rally may quickly fade.
Dogecoin is at a make-or-break moment. The TD Sequential buy signal offers hope, but with weak inflows, elevated leverage, and mounting long liquidations, the bulls face an uphill battle. The next few sessions will be crucial in determining whether DOGE rockets higher—or rolls over under pressure.
