Dogecoin's price dipped by 5% on Thursday, touching the $0.35 level, as bullish catalysts triggered a "sell-the-news" reaction. Despite recent optimism, traders are closely monitoring key support and resistance levels for signs of a potential rebound.
Market Context: DOGE Reacts to Positive News with a Pullback
Dogecoin’s price faced significant selling pressure on Thursday, even amid notable positive developments. Earlier in the week, former U.S. President Donald Trump formally endorsed the cryptocurrency by displaying the Dogecoin logo on the official website of the "Department of Government Efficiency" initiative. This action, combined with Elon Musk’s longstanding support for DOGE, initially fueled market enthusiasm.
Shortly after, asset management firm Bitwise submitted an application to the U.S. Securities and Exchange Commission (SEC) for a spot Dogecoin Exchange-Traded Fund (ETF). This filing marks a major step toward institutional adoption, potentially opening doors to significant capital inflows.
However, these developments prompted many holders to take profits. A considerable number of investors entered the market in late 2024 when Musk publicly supported Trump’s campaign, and by January 2025, some were sitting on unrealized gains exceeding 200%. The combination of a strong rally and bullish news created an ideal environment for profit-taking, leading to the 5% decline.
Despite the sell-off, the fundamental outlook for Dogecoin remains strong. The Bitwise ETF application underscores growing institutional interest, which could support longer-term price appreciation.
Technical Analysis: Key Support and Resistance Levels
At the time of writing, Dogecoin is trading around $0.3505. Daily chart analysis indicates that buyers are actively defending the crucial $0.33 support level. A sustained hold above this level could set the stage for a rebound.
The Bollinger Bands are currently narrowing, suggesting reduced volatility and a potential consolidation phase before the next significant price movement. DOGE is testing the lower band near $0.35, which often indicates an oversold condition. A reversal from this level could attract new buying interest and upward momentum.
The Relative Strength Index (RSI) is at 47.68, hovering near neutral territory but still below its signal line. This indicates that bearish momentum may be weakening, though buyers have yet to regain full control.
In a bullish scenario, Dogecoin would need to reclaim the middle Bollinger Band at $0.362 decisively. A break above this level could open the path toward the upper band near $0.41. Increased trading volume would be essential to confirm such a move.
On the flip side, a breakdown below $0.33 could lead to further declines, with next supports located at $0.31 and $0.28. Traders should monitor volume spikes and RSI movements for early signals of the next directional trend.
Leverage and Liquidation Data Suggest Potential Rebound
The recent dip appears driven largely by profit-taking rather than a shift in market sentiment. Interestingly, leverage data reveals that traders are positioning for a possible rebound.
Coinglass liquidation charts indicate that active short positions currently total $92 million, significantly outweighing long positions valued at $65 million. While this suggests a bearish dominance on the surface, a deeper look shows that more than 80% of all active DOGE short positions are concentrated near the $0.33 price level.
This clustering implies that if Dogecoin’s price drops to $0.33, bearish traders could liquidate up to $55 million in positions. To avoid these losses, leveraged long traders may intensify buying activity around this level, potentially triggering a short squeeze and accelerating a rebound.
Moreover, the Bitwise ETF news may continue to fuel mid-term optimism. If institutional demand materializes, Dogecoin could see renewed interest not just from retail traders but from larger-scale investors. For those looking to track these developments in real time, tools like 👉 real-time market analysis platforms can provide valuable insights.
Frequently Asked Questions
What is a spot ETF, and how could it affect Dogecoin?
A spot ETF would allow investors to gain exposure to Dogecoin without directly holding the asset. If approved, it could attract institutional capital, increase liquidity, and potentially drive up the price due to higher demand.
Why did DOGE drop despite positive news?
The decline was primarily due to profit-taking. Many traders who bought at lower levels sold after significant gains, creating a "sell-the-news" effect. This is common in volatile markets when assets rally ahead of major announcements.
What are the main support levels for Dogecoin?
The immediate support is at $0.33. If broken, the next key levels are $0.31 and $0.28. Holding above $0.33 is critical for maintaining bullish momentum in the short term.
Could DOGE really reach $1?
While possible, reaching $1 would require a substantial increase in market capitalization, ongoing positive catalysts, and broader adoption. The ETF application is a step in that direction, but regulatory approval and market conditions will play decisive roles.
How does leverage trading influence Dogecoin’s price?
High leverage magnifies both gains and losses. Concentration of leveraged positions at certain price levels can lead to rapid liquidations, increasing volatility and sometimes triggering sharp reversals.
Where can I learn more about trading strategies?
For those interested in improving their trading techniques, exploring 👉 advanced educational resources can be highly beneficial. These platforms often offer market insights, technical analysis tutorials, and real-time data.
Conclusion
Dogecoin’s short-term price action hinges on the $0.33 support level. While recent selling pressure has been noticeable, the underlying fundamentals—including high-profile endorsements and a landmark ETF application—suggest potential for recovery. Traders should watch for volume increases and key technical levels to gauge the next major move.