Dogecoin’s Funding Rate Soars: Is a Breakout Imminent?
Dogecoin’s Funding Rate Soars: Is a Breakout Imminent?
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After days of choppy trading, Dogecoin is hovering near a crucial liquidity level around $0.112. While the broader crypto market, led by Bitcoin, is experiencing a notable surge from its yearly lows, driven by positive economic data and improving sentiment, Dogecoin has yet to follow suit. Other altcoins and meme coins have rallied, but DOGE remains in consolidation.
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Analysts and investors are closely watching for signs that could confirm a further uptrend for Dogecoin. The funding rate, which indicates rising demand, suggests that a potential price increase may be on the horizon. Top analyst and investor Ali has shared an intriguing buy signal for DOGE, hinting at gains in the near future.
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Is Dogecoin Ready to Break Out?
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As market sentiment shifts, traders are closely monitoring whether Dogecoin will follow the broader crypto trend and break out of its current range. Dogecoin is currently at a pivotal level that will determine its price action, as DOGE has struggled to hold above this area since early August. While speculation surrounding DOGE’s performance in the coming months is optimistic, Dogecoin needs to catch up with the gains other meme coins have delivered to investors.
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Prominent analyst Ali has shared a technical chart on X, highlighting a buy signal for Dogecoin on the 4-hour price chart. This signal carries significance because it appears in a shorter timeframe and often indicates a larger trend shift in the daily timeframe, suggesting a potential upside in the coming days. If this signal plays out, it could initiate a stronger upward movement for DOGE.
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Positive Funding Rate Fuels Optimism
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Supporting this optimistic outlook, key data from Coinglass reveals that the OI-weighted funding rate for Dogecoin is rising. A positive funding rate in cryptocurrency markets indicates that the price of perpetual futures contracts is higher than the spot price of the underlying asset. This signifies that long positions are becoming more dominant, and long traders are paying short traders a positive funding rate. This dynamic reflects increased demand for DOGE and hints at potential gains ahead.
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Can Dogecoin Break Above Resistance?
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Dogecoin (DOGE) currently trades at $0.112 after several days of sideways trading below the daily 200 exponential moving average (EMA), which sits at $0.116. This level has acted as key resistance, and DOGE must gain momentum to break above it. If the price manages to recover the 1D 200 EMA and push past the $0.13 mark, it could signal the start of a significant rally for Dogecoin. Such a move would likely reignite investor interest and attract new buying demand, potentially driving higher prices.
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However, if Dogecoin fails to hold above the $0.11 level and continues to struggle with the 1D 200 EMA, a deeper correction could be on the horizon. In that scenario, DOGE may retrace to lower demand areas around $0.09, where buyers might step in to prevent further downside.
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Looking Ahead
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For now, Dogecoin’s price action remains in a tight range, and traders are watching closely to see if it can reclaim these critical levels or if a larger pullback is in store. The next few days will be essential in determining the future direction of DOGE’s price.
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**Featured image from Dall-E, chart from TradingView**