Dogecoin Surges 18% as US-UK Trade Agreement Bolsters Crypto Market Sentiment
The cryptocurrency landscape received a significant boost this week following a trade agreement between the United States and the United Kingdom, fueling renewed investor confidence in digital assets. Dogecoin (DOGE) has seen a remarkable 18% increase, reclaiming the $0.20 threshold as market activity heats up.
Market Reaction to Trade Agreement
As of Friday, Dogecoin is trading at approximately $0.206, after successfully breaking through key resistance levels earlier in the week. This rally has been largely attributed to the enthusiastic market response generated by the newly signed trade deal, which has invigorated the cryptocurrency sector as a whole.
Investor optimism is reflected in Dogecoin’s recent performances, as it surged past its 50-day and 100-day exponential moving averages (EMA) — traditionally strong resistance areas for the meme coin. The spike in interest is further underscored by an 18% increase in open interest, now at $2.17 billion, indicating heightened activity among both retail and institutional traders.
Massive Liquidations Due to Increased Volatility
The surge in Dogecoin’s value has triggered a wave of liquidations in the futures market, with approximately $13 million in positions liquidated within just the past 24 hours. Data from Coinglass indicates that short liquidations dominated, totaling $11.3 million, as traders with bearish positions were forced to exit swiftly in response to rapid price gains, thereby pushing prices higher.
This imbalance highlights a typical short squeeze scenario, wherein the rising prices compel short sellers to cover their positions, confirming the bullish momentum. The long/short ratio on Binance stands at 2.4602, reinforcing the trend that more traders are betting on further increases in Dogecoin’s price. In a sign of robust market activity, trading volume for DOGE surged by 74.49% to reach $4.5 billion within 24 hours.
Technical Indicators Suggest Further Gains Ahead
Dogecoin is currently emerging from a classic reverse head and shoulders pattern, a formation typically viewed as a bullish reversal signal. This setup, visible on daily charts, suggests a potential price movement of 33% from the breakout level, setting the next target at approximately $0.24.
If DOGE stabilizes above the 100-day EMA at $0.20, momentum is expected to continue in upcoming sessions. The MACD indicator also points toward an optimistic outlook, revealing a positive divergence, with green histogram bars above the midline indicating rising upward pressure.
However, traders should exercise caution as the Relative Strength Index (RSI) currently sits at 70.31, entering the overbought zone. Although this doesn’t immediately signal a reversal, it often precedes short-term corrections. Should DOGE retrace from its current levels, the 50-day EMA at $0.18 may present a critical support level and a potential buying opportunity.
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