Dogecoin is showing early signs of recovery after consolidating within a defined range, with the price defending a key support zone near $0.071 as buyers regained control following weeks of sustained selling pressure.

The memecoin has rebounded toward a descending trendline, while momentum indicators are beginning to improve. This hints at a potential shift in short-term sentiment, while liquidation data suggests the possibility of a short squeeze. The central question is whether Dogecoin can break through resistance and extend the current rebound toward $0.08. Dogecoin, the largest memecoin by market capitalization, has historically been sensitive to shifts in retail sentiment and broader crypto market direction, making its technical setups closely watched by traders despite its origins as a novelty asset.

Dogecoin Defends Key Support, Bulls Challenge Trendline Resistance

Dogecoin has rebounded after successfully defending the $0.071–$0.072 demand zone, a level that has repeatedly attracted buyers over the past few weeks. The daily chart shows DOGE bouncing from this support while attempting to break above a descending trendline that has capped every recovery since late June.

The Relative Strength Index (RSI) has climbed to approximately 45, recovering from oversold territory and indicating improving buying momentum. However, the indicator remains below the neutral 50 mark, suggesting that bulls still need stronger follow-through to confirm a sustained trend reversal. Meanwhile, Bollinger Bands are showing signs of contraction, a pattern that typically precedes significant price action, potentially above the upper band resistance at $0.076.

Short Liquidation Cluster Signals Potential Upside Acceleration

Beyond the price chart, derivatives data also supports the possibility of a stronger recovery. According to CoinGlass' 30-day liquidation map, a significant concentration of short liquidations is positioned between $0.075 and $0.081, well above DOGE's current trading range. This suggests that many traders are positioned for further downside, creating a potential fuel source for an upside move. Liquidation maps aggregate estimated leverage positions across major exchanges, providing a snapshot of where forced liquidations could cluster if price moves sharply in either direction.

At the same time, the liquidation map shows relatively fewer long liquidation clusters below the current price, indicating that much of the downside liquidation pressure has already been absorbed. If Dogecoin manages to break above the immediate resistance near $0.074, these leveraged short positions could begin to unwind, forcing traders to buy back their positions. Such a chain reaction, commonly known as a short squeeze, often amplifies bullish momentum and drives prices higher over a short period. As a result, a confirmed breakout above the descending trendline may encourage DOGE to target the $0.076–$0.081 liquidity zone in the near term.

Key Levels to Watch

Dogecoin's near-term trajectory will likely depend on whether buyers can sustain the current recovery and reclaim key resistance levels. A decisive move above the immediate hurdle could attract fresh buying interest while also triggering the liquidation of leveraged short positions, potentially accelerating the upside move.

The first hurdle lies around $0.074–$0.076; a sustained close above this range would signal strengthening bullish momentum. On the downside, the $0.071 support remains the level to watch. Losing this zone would invalidate the current rebound setup and expose the memecoin to a deeper correction toward $0.069 or lower.