- Dogecoin price rebounded 13% to reclaim territory above $0.40 on Friday, ending a week-long consolidation phase.
- DOGE traders deployed $355 million in leveraged long positions following Gary Gensler’s exit confirmation.
- DOGE price trading 3% above its volume-weighted average price (VWAP) suggests another breakout could follow.
Dogecoin price rose above $0.40 on Friday, following a week-long consolidation that saw DOGE fall 13% from last week’s high. Derivatives market reports link DOGE’s rally to Gary Gensler’s impending exit.
Dogecoin recovers $0.40 as markets react to Gensler’s departure
Elon Musk’s involvement in the proposed Department of Government Efficiency (DOGE) project under the new Trump administration drove the price of Dogecoin to a three-year high on November 12. But since then, DOGE has entered a 10-day consolidation phase as traders started taking profits. .
The chart above shows how the price of DOGE surged 185% between November 5 and 12, before succumbing to a 13% decline over the next ten days.
When DOGE price opened at $0.38 on November 21, it reflected a 13% decline from the three-year high of $0.44 recorded when Trump confirmed the formation of DOGE on November 12.
However, on Thursday, reports emerged that the chairman of the United States Securities & Exchange Commission (SEC), Gary Gensler, is expected to resign from his position on January 20.
Crypto enthusiasts reacted positively to the news as it signals the end of a controversial regime fraught with scrutiny and litigation against several crypto companies and high-profile figures.
Within 24 hours of the announcement, the global crypto market hit new all-time highs above $3.25 trillion, sending top-ranked coins including Dogecoin, XRP and Cardano to gains two digits. At the time of writing, on November 22, DOGE price surpassed the $0.42 level, reporting gains of 13% over the past 24 hours.
Bulls Rise to $355 in Long Positions to Capitalize on Positive Market Sentiment
As DOGE price broke the vital $0.40 resistance on Friday, bullish traders gained a foothold in derivatives markets. Confirming this narrative, the volume of leverage deployed on Dogecoin futures over the past 24 hours has far exceeded shorts, a move that often predicts major price breakouts.
The Coinglass liquidation map below shows real-time balances of long and short leveraged contracts deployed around current ADA prices.
Cardano Liquidation Card | Source: Coinglass
Long leveraged positions in Dogecoin (DOGE) reached $355.5 million, while short contracts stood at $162.6 million on Friday. With long positions outpacing short positions by approximately $192.9 million, this demonstrates 118.7% more capital deployed on the bull side. This suggests that Dogecoin bulls have gained short-term dominance in the derivatives markets.
When leveraged long positions exceed short positions by such a large margin, it generally signals two key bullish indicators:
- Increased market confidence:
Higher long positions indicate that traders are optimistic about Dogecoin’s near-term price trajectory. If DOGE bulls support their highly leveraged positions with rapid spot purchases, this could amplify upward price volatility.
- Potential short squeezes:
When shorts are overwhelmed by bullish leverage, any upward price movement can trigger stop-losses on short positions, forcing them to close and repurchase DOGE. This cascading effect could potentially drive Dogecoin prices higher in the days to come.
Dogecoin Price Prediction: $0.45 Breakout Could Trigger Bigger Gains
If Dogecoin maintains this bullish leverage imbalance while holding key support levels, it could propel prices towards higher resistance targets around $0.45.
Confirming this bullish forecast, the widening of the Bollinger band indicators are reporting increased volumes and volatility, highlighting the likelihood of a retest of $0.45.
More so, DOGE price is currently trading above its volume weighted average price (VWAP) at $0.40. If DOGE closes above this key support level amid positive speculative pressure, a breakout towards $0.45 could be on the cards.
Dogecoin Price Forecast | DOGEUSDT
Dogecoin Price Forecast | DOGEUSDT However, traders should remain cautious as excessive leverage can lead to sharp corrections if the market reverses.
In such a scenario, if the bulls fail to hold the $0.40 support, long and fast liquidations could trigger a breakout towards the 20-day simple moving average (SMA) at $0.31.