Dogecoin price increases by 18% following trade deal, boosting crypto market

The Dogecoin (DOGE) market saw a remarkable 18% surge this week, bolstered by renewed market optimism following the United States and United Kingdom’s trade agreement. This surge lifted DOGE past the $0.20 threshold, breaching significant resistance levels on Thursday and riding on the positive momentum seen across diverse digital assets.

The agreement between the US and the UK served as a catalyst for DOGE’s bullish run, reflecting broader investor confidence in the digital asset sector. Market recoveries and sentiment boosts helped Dogecoin overcome the challenges posed by its 50-day and 100-day exponential moving averages (EMAs), which have historically been strong resistance levels for the cryptocurrency. Presently, DOGE is trading at approximately $0.206, stabilizing its position above the $0.20 support mark.

The recent price movement has been met with a surge in trading volume and derivatives activity, indicating heightened participation from both retail and institutional traders. This surge in activity has led to a significant rise in Open Interest (OI) in DOGE futures, climbing 18% to $2.17 billion, showcasing an increasing appetite from market players.

The rally in Dogecoin market also sparked liquidations in the futures market, with around $13 million worth of positions liquidated in the past 24 hours. Notably, short liquidations accounted for $11.3 million, surpassing long liquidation amounts. This trend signifies a classic short squeeze scenario, wherein strong upward price movement forces bearish traders to exit rapidly, further propelling prices higher.

Analyzing the technical indicators, DOGE has completed an inverse head and shoulders pattern, suggesting a bullish reversal signal. With the breakout level reached, the forecast points to a potential 33% surge from this level, targeting the next price objective at $0.24. The current focus for DOGE is to maintain stability above the 100-day EMA at $0.20.

The MACD indicator for DOGE presents positive divergence, with the green histogram bars positioned above the centerline, indicating increasing upward momentum. However, traders should exercise caution as the RSI (Relative Strength Index) has entered the overbought zone at 70.31, signifying the possibility of short-term corrections. In case of a retracement, the 50-day EMA at $0.18 could potentially serve as a key support and re-entry level.

In conclusion, the recent surge in DOGE price following the US-UK trade deal signifies a reaffirmed confidence in the cryptocurrency market, with Dogecoin showcasing potential for further upward movement based on its technical breakout and increased trader participation. Investors in the volatile crypto market should remain vigilant to capitalize on potential opportunities while navigating risks associated with market corrections.