As the broader memecoin sector surged, Dogecoin [DOGE] recorded a daily surge of 13.04% at press time, alongside an increased activity, bringing the memecoin closer to a major technical breakout attempt.
Notably, Dogecoin’s spot trading volume climbed 239.5% to around $3.48 billion in 24 hours. The rise suggested considerably more capital changing hands as DOGE approached the the crucial $0.10 region. The price rally, therefore, carried a stronger market involvement than a low-volume price recovery would have offered.
Also noteworthy, the Dogecoin price rally was supported by the broader market activity shifted toward the memecoin during the recent session.
However, the stronger trading activity alone did not remove the selling pressure developing across spot and futures markets. The derivatives’ positioning also offered another measure of whether market participants injected fresh liquidity during the recovery.
Fresh leverage joins DOGE’s rally
Accordingly, the memecoin’s derivatives market also expanded considerably as the market participants increased exposure during the price increase.
According to CoinGlass data, the derivatives volume surged 212.47% to $5.02 billion as of writing, closely accompanying the rapid increase in the spot trading activity.
More importantly, the open interest also saw an increase of 24.01% to $1.66 billion as DOGE pushed towards the $0.10 zone. This surge in derivative activity suggested traders introduced new positions rather than merely closing the existing exposure as the rally unfolded.
The leverage, therefore, expanded along with the price, giving the recovery another supportive component of market participation. However, it is also worth noting that the growing open interest also increased DOGE’s sensitivity to sudden price swings and leveraged position unwinding.
Meanwhile, the ongoing exchange inflows provided another source of potential supply pressure despite DOGE breaking above its weekly descending channel.
Can sellers disrupt DOGE’s recovery?
As per CryptoQuant, DOGE registered nearly $5.64 million in spot net inflows at press time, reversing the latest exchange-flow pattern.
This positive netflows implied that the exchange inflows exceeded its outflows, expanding the DOGE available across the trading platforms.
Additionally, the increasing supply pressure coincided with the Futures Taker CVD remaining seller-dominant. Therefore, the aggressive futures sellers continued challenging the buying activity surrounding DOGE’s recent advance.
Eventually, if the inflows persist, taker selling could eventually limit the price continuation in case buying activity weakens
However for now, Dogecoin’s technical structure provided a clearer threshold for determining whether the buyers could sustain the selling pressure.
DOGE breaks free from its descending channel
As the rally unfolded, Dogecoin’s price decisively broke above its weekly descending channel after rebounding strongly from the $0.0690 support area.
Notably, before the breakout, the memecoin reclaimed the $0.08214 price level. This reinforces the technical recovery structure that emerged from its July lows.
Subsequently, DOGE then pushed above the channel resistance, breaking above the $0.10 level as buyers advanced the recovery.
More importantly, the MACD indicator also supported the breakout following a bullish crossover, as the positive histogram bars continued expanding.
Notably, the breakout shifted attention towards the $0.11259 level, which represented the immediate key horizontal resistance on the weekly chart.
A strong hold above the broken channel would strengthen DOGE’s prospects of challenging that level, exposing the larger $0.15000 supply zone.
Alternatively, losing the breakout structure could trigger a retracement towards the $0.08214 level as a key downside support.
Final Summmary
-
DOGE broke its descending channel as surging trading activity strengthened the 13% rally.
-
Spot inflows and futures selling could test DOGE before another push toward $0.11259.
