Dogecoin (DOGE) has slipped 3.8% in the past 24 hours and is now trading around $0.1991.
This drop is no ordinary correction. DOGE broke below its 7-day moving average (SMA) at $0.204 and a key Fibonacci level at $0.197, two technical barriers that often trigger large reactions. And indeed, this breakout immediately triggered algorithmic selling.
Dogecoin’s biggest short squeeze risk is building at $0.208
But the story isn’t over. According to analyst The Kingfisher, the liquidation map shows that the largest cluster of short liquidations is forming around $0.208.
To some traders, this may just be a number. But for the discerning, this number is a kind of “price magnet.” The more short positions that gather at one level, the greater the chance that the price will be pulled there, trapping bears.
On the other hand, pressure from the long side appears more spread out and less concentrated. This means that the greatest pain will come to those betting on Dogecoin’s price to fall, and this often triggers sharp upward movements.
Interestingly, in the last 24 hours, DOGE’s open interest in the derivatives market reached $3.09 billion, before dropping 22%. More than $3 million in positions were liquidated. This is no small figure, especially considering that leveraged traders appear to be slowly retreating.
Furthermore, the price structure that previously formed an inverse head-and-shoulders pattern is now considered no longer valid. Traders’ focus has shifted to the next support level at $0.194, which also happens to be the 76.4% Fibonacci level. This is a point that many market participants are watching closely.
However, it’s not just the technical side that’s attracting attention. On the development side, the MyDoge team recently proposed the integration of zero-knowledge proof technology and compatibility with Ethereum via zkVM.
This could set the stage for DeFi, gaming, and cross-chain exchanges atop the Dogecoin ecosystem, without abandoning the PoW mechanism that has long been its hallmark.