Will Dogecoin Price Break $0.31 as Liquidation Pressure Builds

Key Insights:Dogecoin OI hits 30-day high at $2.29B, reflecting renewed bullish trader interest.DOGE price breakout above $0.20 targets $0.3159 amid rounding bottom formation.$31.85M in bearish liquidations risk short squeeze if DOGE surpasses $0.2135.Dogecoin (DOGE) price recent rally has generated interest in the market as its price broke the $0.20 threshold, with the next level expected to be the $0.31 mark. As bullish momentum increases, traders wait to see if there is a chance for a breakout that may propel the meme coin to this crucial resistance level.Dogecoin Open Interest Hits 30-Day HighDOGE Open Interest (OI) reached a 30-day high, indicating an upswing in trading volumes. The OI clocked $2.29 billion, a close to 10% increase from the previous levels. This upsurge of OI is indicative of a new wave of traders’ interest and implies that investors are preparing for further price action.Dogecoin Open Interest Source: CoinglassConsequently, the rise in OI came after Dogecoin price broke above the key $0.20 position that has been a critical resistance point for months. This level is now a key support layer and potentially an engine for a subsequent rally up to $0.31. If the buying pressure persists, this may push the OI even higher, strengthening the existing bullish momentum.Rounding Bottom Breakout Targets $0.31Meanwhile, technical analysis revealed a rounding bottom formation, a classic bullish reversal pattern that has been forming on the Dogecoin chart. This formation typically indicates a shift from a bearish to a bullish trend, with its depth serving as a guide for potential upside targets.Subsequently, the confirmation of the pattern came on the current DOGE price action, with a breakout above $0.20 adding a 55% upside from the neckline of the formation. This is aiming at the $0.3159 level, which is close to the psychological $0.31 resistance.Liquidation Pressure Builds as Short Positions ThreatenedMoreover, this bullish trend also threatens traders holding short positions. Coinglass data estimated that a 2% movement to $0.2135 may trigger a wave of liquidations with a $31.85 million value. This short squeeze potential could further accelerate Dogecoin price upward trajectory, amplifying the impact of any positive price momentum.Dogecoin Exchange Liquidation MapNotably, short liquidations can establish a feedback loop, compelling bearish traders to cover their positions as prices move up, thus increasing the upward pressure. This scenario has repeated in the past, resulting in price spikes during a bullish breakout.Outlook for Dogecoin price Remains Bullish if Key Levels HoldMore so, analyst Ali Martinez pointed out that Dogecoin was sharply rebounding from its ascending support trendline and may target the $0.27 resistance. The chart exhibited a neat upward bounce from the long-term trend line, matching the 0.382 Fibonacci retracement level around $0.27.Dogecoin Price Chart Source: XMartinez added that this bullish momentum may propel DOGE to higher targets if the demand for the coin continues, possibly hitting the 0.5 Fibonacci level at $0.31. However, a break below the trendline could weaken the existing bullish outlook.Additionally, analyst Trader Tardigrade also monitored Dogecoin Rate of Change (ROC). He noted that it has broken its base, implying the meme coin might be rallying strongly soon. The chart indicated earlier instances where a ROC breakout from this trendline triggered relative gains of 278%, which took DOGE to $0.35 and $0.46, respectively.As for the current breakout, confirming a strong support trendline, another similar 3x lift could urge Dogecoin to the $0.46 mark if the momentum is sustained.Dogecoin Price Chart Source: XFurther supporting a bullish outlook, a recent analysis indicated that Dogecoin price completed a falling wedge breakout, signaling a potential long-term recovery to $0.65. Analysts highlighted the ongoing short-term rally toward $0.25, supported by a bullish flag breakout.Additionally, the ascending trendline from October 2024 remained intact, providing a solid support base for further gains. If momentum continues, Dogecoin could reach the 0.786 Fibonacci level near $0.65.DisclaimerThis article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss. That may occur from investing in or trading. Please do your research before making any financial decisions.Ronny MugendiThe post Will Dogecoin Price Break $0.31 as Liquidation Pressure Builds appeared first on The Market Periodical.