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Trading activity for Dogecoin has increased dramatically; in recent sessions, total volume has increased by more than 100%. The increase in liquidity raises concerns about whether traders are starting to pay more attention to meme coins, at a time when the larger cryptocurrency market is trying to stabilize following months of pressure.
DOGE aims low
Even with the increase in volume, Dogecoin's price movement is still quite controlled. The asset is currently trading at about $0.092, exhibiting very little movement in relation to the volume of trading activity. The price has slightly declined over the past day, which is indicative of the continuous conflict between buyers trying to start a recovery and sellers keeping control of the overall trend.
Dogecoin is still technically stuck in a downtrend that started at the end of last year. The price is trading below a number of important moving averages, and the chart structure displays a steady series of lower highs and lower lows. As dynamic resistance, these indicators keep sloping downward, preventing the formation of significant upward momentum.
Pure volume not enough
The increase in trading volume is still significant, though. Increased trading activity frequently indicates that traders are starting to get ahead of possible volatility. Despite a weak chart structure, Dogecoin's long-short ratios on the derivatives market are still very bullish, indicating that many traders anticipate a rebound.
Price movements can become erratic when the market is dominated by long exposure. Heavily leveraged long positions may be forced to close if the anticipated rally does not happen, which could intensify downward pressure.
Dogecoin is still profiting from being one of the most well-known meme coins on the market. When traders start shifting their capital back into speculative assets, periods of increasing volume frequently occur.
In the past, meme coins have typically experienced spikes in activity when the market is feeling optimistic again or when Bitcoin has stabilized following a correction.
Dogecoin seems to be going through a transition right now. The price has not yet confirmed a significant change in trend, but the significant increase in volume suggests increasing engagement.
Dan Burgin
Vladislav Sopov
