Dogecoin Price Forecast: Bulls deploy $355M in DOGE longs amid Gensler exit confirmation
|- Dogecoin price bounced 13% higher to reclaim territory above $0.40 on Friday, snapping a weeklong consolidation phase.
- DOGE traders deployed $355 million on 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 crossed $0.40 on Friday, after a weeklong consolidation that saw DOGE tumble 13% from last week’s peak. Derivative market reports link the DOGE rally to Gary Gensler’s imminent exit.
Dogecoin reclaims $0.40 as markets react to Gensler’s exit
Elon Musk’s involvement in the proposed Department of Government Efficiency (D.O.G.E) under the incoming Trump administration drove Dogecoin price to a three-year peak on November 12. But since then, DOGE slipped into a 10-day long consolidation phase as traders began taking profits.
The chart above depicts how DOGE price surged 185% between November 5 and November 12, before succumbing to a 13% dip in the subsequent ten days.
When DOGE price opened trading at $0.38 on November 21, it reflected a 13% dip from the three-year peak of $0.44 recorded when Trump confirmed the D.O.G.E. formation on November 12.
However, on Thursday, news reports revealed that the head of the US Securities & Exchange Commission (SEC), Chair Gary Gensler, is set to step down from his position on January 20.
Crypto enthusiasts reacted to the news positively as it signals an end to a controversial regime fraught by intense scrutiny and litigation against several crypto firms and high-profile personalities.
Within 24 hours of the announcement, the global crypto market rose to new all-time highs above $3.25 trillion, lifting top ranked coins including Dogecoin, XRP and Cardano into double-digit gains. At the time of writing on November 22, DOGE price has moved above the $0.42 level, signaling 13% gains in the last 24 hours.
Bulls mount $355 in long positions to capitalize on positive market sentiment
As DOGE price moved above the vital $0.40 resistance on Friday, bullish traders have gained a foothold in the derivatives markets. Confirming this narrative, the volume of leverage deployed on Dogecoin futures contracts in the last 24 hours far exceeded the shorts, a move that often predicts major price breakouts.
The Coinglass liquidation map chart below shows the real-time balances of long and short leverage contracts deployed around the current ADA prices.
Cardano liquidation map | Source: Coinglass
The long leverage positions on Dogecoin (DOGE) reached $355.5 million, while short contracts stood at $162.6 million on Friday. With longs exceeding shorts by approximately $192.9 million, this demonstrates 118.7% higher capital deployed on the bullish side. This suggests that Dogecoin bulls have gained short-term dominance in the derivatives markets.
When long leverage positions outpace shorts by such a significant margin, it usually signals two key bullish indicators:
- Increased Market Confidence:
Higher long positions indicate that traders are optimistic about Dogecoin's short-term price trajectory. If DOGE bulls support their highly-leveraged positions with rapid spot purchases, it 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 buy back DOGE. This cascading effect could potentially drive Dogecoin prices higher in the days ahead.
Dogecoin price forecast: $0.45 breakout could trigger larger gains
If Dogecoin sustains this bullish leverage imbalance while maintaining key support levels, it could propel prices toward higher resistance targets around $0.45.
Confirming this bullish forecast, the widening Bollinger Band indicators signal rising volumes and volatility, emphasizing the likelihood of a $0.45 retest.
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 toward $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, rapid long liquidations could trigger a breakdown toward the 20-day Simple Moving Average (SMA) at $0.31.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.