Dogecoin, one of the prominent cryptocurrencies, has been showing marvelous resilience as the crypto market crashed greatly. According to analyst CRG, the performance is “incredible,” which should translate to the fact that the coin is quite close to a powerful recovery.
The crypto market has just experienced one of the largest leverage flushes since April 2021, where volatility smashed altcoins. Yet amidst the turbulence, Dogecoin has shown remarkable resilience. As per crypto analyst CRG (@MacroCRG), the strength of Dogecoin has been “incredible.” The author believes that it is now ready for future growth, given the challenges the market is currently facing.
Introduction: How Dogecoin Defied Odds
The cryptocurrency market has been quite turbulent lately, with considerable sell-offs and leverage liquidations tearing up the entire space. Meanwhile, for some investors, Dogecoin shines brightly like a ray of hope. Some altcoins witnessed sharp declines while Dogecoin (DOGE) oddly managed to show remarkable strength, leading some analysts to feel that such a major upward movement would soon be witnessed.
Recently, the famous crypto analyst CRG commented on his observations regarding Dogecoin and its robustness in the challenging market environment. As said by CRG, “Dogecoin is showing extraordinary strength and will likely remain so.” So, let’s take apart why Dogecoin stands out in the crypto crash and why the forecast is so optimistic.
Why Dogecoin Looks ‘Incredible’?
All these happening, Dogecoin sustained its most important support level in this period. CRG shared this below chart with comments: “DOGE looks incredible. The whole market shat itself but it barely flinched and didn’t break structure. Now funding has completely reset and a ton of OI has been washed out. Won’t be long until this is trending hard again IMO.”
Dogecoin price analysis
The chart has highlighted several crucial insights that support his positive expectations of DOGE. As a matter of fact, Dogecoin has been sustaining an essential uptrend line in the 4-hour chart (DOGE/USDT). The trend line has remained a dynamic support level on which the price of Dogecoin has only recently interacted but failed to breach three times since the middle of November.
Each time this trend line is touched, the Dogecoin price bounced sharply, indicating strong interest by buyers at those levels. That alignment with an uptrend line is important as it is meant to denote both support and growing investor confidence each time the price falls towards the said line and bounces off after that.
Resistance, however, was set up at about the $0.47 level. This level has been tested more than once. Every attempt to break above this level has been met by a resistance level. Multiple tests of this resistance level with no breakthrough may typically mean consolidation, building up for perhaps an even stronger move if market sentiment shifts positively.
Moreover, the above chart shows that stablecoin-margined open interest experienced a major decline. According to data by Coinglass, 86.29 million long DOGE positions were liquidated on 9 December-the highest in liquidation history since the 2021 bull run.
This cleansing of open interest is highly suggestive of a significant washout of speculative positions, usually considered a rebooting of the market where any weak hands are sold out, and the excess leverage is stripped. Curiously, this cleansing of the participants could be another sign that a more sustainable upward move is brewing.
Another significant feature highlighted by the chart is the resetting of funding rates to lower levels which become very important in cutting the carrying costs of holding long positions. Lower funding rates tend to spur new buying activity, especially on the part of participants who otherwise found themselves sidelined by costs in maintaining leveraged positions.
CRG also comments on the Cumulative Volume Delta, or CVD, for both futures and spot markets. The CVD of futures is now below that of the spot market, indicating that futures traders may be more bearish than the spot traders or closing existing positions more aggressively than the spot traders. This is a divergence where the spot market, being less speculative, still holds bullishness and acts as a cushion against the bearish futures markets.
Dogecoin: Market Conditions at Present
It was severely down on December 9; in fact, most asset classes had plummeted to an enormous degree. In this context, DOGE managed to hold the crucial support line, and investors and analysts were talking about it. This also speaks for high demand and investor confidence surrounding DOGE during the general market sell-off.
Dogecoin: Technical Observation
CRG’s analysis shows key technical signals for Dogecoin’s potential growth:
1. Support Levels: Dogecoin has repeatedly bounced off a key uptrend line since mid-November, showing strong buying interest.
2. Resistance Levels: The price has struggled to break through $0.47, indicating a phase of consolidation, which could lead to growth if market conditions improve.
3. Open Interest Reduction: Those $86.29 million in DOGE long positions liquidated on 9 December flushed out the speculative positions and rebooted the market.
4. Funding Rate Reset: The lower funding rates will be cheaper to hold longs and may prompt more buys.
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Conclusion: Even with the recent downtrends of Dogecoin experienced in the cryptocurrency market, the mere ability of the currency to hold its support levels and start showing some form of resilience is laudable. With quite good technical indicators along with the possibility of resetting speculative positions, analysts like CRG are positive that DOGE is going to see good future performance. For now, Dogecoin trades at about $0.40, and it’s a journey that can potentially position itself for substantial upside momentum shortly.
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