Catalysts That Suggests The Dogecoin Price Rally Could Continue

Overview

Recent developments have indicated that the Dogecoin price may continue its upward momentum. Following a notable gain at the start of the year, various factors suggest that the meme coin could break through its current resistance level.

Factors Contributing to Dogecoin’s Price Rally

One significant factor driving the potential for a sustained Dogecoin price rally is the recent inflows into Dogecoin exchange-traded funds (ETFs). Data from SoSoValue reveals that Bitwise and Grayscale’s funds have experienced net inflows on two out of three trading days this year. Specifically, Dogecoin ETFs recorded inflows of $2.30 million and $1.60 million on January 2 and January 5, respectively. This marks the first occurrence of consecutive daily net inflows since December 3 of the previous year. Such inflows indicate a renewed interest in Dogecoin among institutional investors, which could positively impact its price trajectory.

Additionally, Bloomberg analyst Eric Balchunas noted that a 2x Dogecoin ETF has had a strong start to the year, outperforming other ETFs with a nearly 40% increase. This performance further highlights the growing institutional interest in Dogecoin, which could lead to continued upward momentum if inflows into these funds persist.

The derivatives market also supports the case for a sustained Dogecoin price rally. Data from CoinGlass shows that traders on leading exchanges, such as Binance and OKX, are currently holding long positions. Specifically, the long/short ratio on Binance stands at 2.06, indicating a strong bullish sentiment, while the ratio for top traders on Binance is at 2.5. Furthermore, CoinGlass reports that derivatives trading volume has surged by over 2% to $5.60 billion. However, open interest has declined by almost 7% to $1.78 billion, likely due to market volatility affecting long positions.

Technical Analysis of Dogecoin Price

As of now, the Dogecoin price is reacting to a local resistance level around $0.15. According to crypto analyst ZiP, breaking through this resistance could lead to a potential price target of approximately $0.24, where the first significant Fibonacci level is located. An additional reference point mentioned is the daily pivot at $0.1288, which serves as the market’s equilibrium level in the short term.

Moreover, crypto analyst Trader Tarigrade pointed out that Dogecoin has broken out of a falling wedge pattern, indicating strong upward momentum. While he believes Dogecoin is poised for a significant surge, he also cautioned that a brief retracement may occur.

As of the latest data, Dogecoin is trading around $0.148, reflecting a decrease of over 2% in the last 24 hours.

From author

The convergence of institutional interest, notable inflows into ETFs, and positive sentiment in the derivatives market creates a compelling narrative for Dogecoin’s price action. However, the volatility and potential for retracements remind investors to proceed with caution. The technical indicators suggest that while the momentum is positive, the market remains sensitive to fluctuations.

Impact on the crypto market

• Institutional interest in Dogecoin is growing, as evidenced by increased inflows into ETFs.
• Positive sentiment among derivatives traders indicates bullish expectations for Dogecoin.
• The potential breakout above the $0.15 resistance could attract further attention and investment.
• Market volatility remains a concern, with a recent decline in open interest signaling caution among traders.
• The overall performance of Dogecoin may influence the sentiment around other cryptocurrencies, particularly meme coins.