Dogecoin Nears Key Support as Liquidity Traps Signal Possible Surge Ahead

Over $380 million liquidity was trapped near Dogecoin’s $0.50 level, historically followed by accumulation and price surges in later months.

The DOGE/BTC pair approaches a critical support level, similar to the setup before Dogecoin’s notable rally in 2021.

The Meme Index of the top 16 memecoins shows early recovery signs, indicating improving sentiment across the memecoin sector.

Dogecoin, the leading memecoin, is attracting renewed attention as technical indicators suggest the possibility of a major price movement.

Trapped Liquidity at $0.50 May Fuel Dogecoin Momentum

A tweet from crypto analyst Joao Wedson points to the 500-day Aggregated Liquidation Level as a key indicator. According to this data, DOGE's last major price drop trapped over $380 million in liquidity near the $0.50 level. This zone has historically been a pivot point, with the memecoin often staging recoveries after such periods of accumulation.

The pattern of shorts piling up has repeatedly led to long-term price builds. Traders familiar with Dogecoin's cycles may recognize the current setup as one that previously preceded upward movements. If this behavior continues, it could signal a gradual push toward higher valuations over the coming months.

DOGE/BTC Pair Approaches a Crucial Support Level

Wedson also highlights that the DOGE/BTC trading pair is nearing a historically important support level. The chart setup mirrors the structure seen just before Dogecoin’s major rally in 2021. During that time, DOGE briefly outperformed Bitcoin in terms of trading volume and investor attention.

The alignment of this support level with current market sentiment adds to the possibility of a price rebound. While past performance does not guarantee future results, the resemblance to previous rally conditions could attract increased focus from traders monitoring the DOGE/BTC trend.

Meme Index Indicates Early Recovery Signs Across Memecoins

The broader memecoin sector may also be recovering, according to data referenced by Wedson. The Meme Index, which includes the 16 largest memecoins by market cap, has started to show early recovery signals following a prolonged downturn.

This rebound may enhance overall sentiment around Dogecoin, positioning it favorably in a shifting market environment. The combined effect of trapped liquidity, historical support, and sector-wide recovery may support renewed interest in the asset as trading activity builds.

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