Dogecoin traders are growing more and more biased. Long positions now greatly exceed short positions on major derivatives exchanges; some platforms report more than three long accounts for every short. Even though it might seem optimistic at first glance, this kind of imbalance has historically produced unfavorable circumstances for long-term price growth, particularly when the underlying asset is still clearly in a downtrend.
Dogecoin is actually bullish
According to current market data, the top traders on Binance have a long-to-short ratio of 3.25, whereas users of OKX are even more aggressive, with a ratio above 3.6. Despite Dogecoin’s lack of technical confirmation, both professional and retail traders continue to wager on higher prices, as evidenced by the larger Binance account ratio, which is still above 2.6.
This optimism is not supported by price action, which is the issue. DOGE is still trading well below all significant exponential moving averages, close to $0.070. The asset is still below the 20-day EMA at $0.073, the 50-day EMA at $0.076, the 100-day EMA at $0.085, and significantly below the 200-day EMA above $0.10. Despite recent stabilization, this alignment shows that the overall trend is still very bearish.
The market is more susceptible to a long squeeze when positioning becomes this skewed while price stays low. Leveraged long positions are compelled to close if support breaks, which increases selling pressure and may quicken the decline. Paradoxically, when positioning reaches such extremes, markets frequently move against the majority. A cautious picture is also presented by open interest data.
You Might Also Like
Derivatives volume has decreased in comparison to prior weeks, indicating that the conviction behind new bullish bets may not be as strong as the positioning ratios suggest, even though trading activity is still strong on Binance, OKX, and Bybit. The same uncertainty is shown on the technical chart.
Not truly neutral
Following a sharp drop in June, Dogecoin has moved sideways for the majority of July, resulting in a narrow consolidation just above the $0.070 support zone. The market lacks a significant bullish catalyst as a result of the bulls’ inability to recover even the nearest moving average, despite their success in stopping another leg lower. Momentum indicators continue to be neutral to slightly negative.
The RSI is currently at 41, indicating that while buying momentum has not yet materialized, selling pressure has decreased. The current consolidation runs the risk of ending to the downside in the absence of increased volume or a clear breakout above the 20-day EMA. Regaining $0.073 is the first goal for bulls, and the more important resistance at $0.076 comes next.
On the downside, losing $0.070 might make DOGE vulnerable to further selling and possibly push the meme coin closer to its annual lows. As of right now, trader positioning rather than price itself is the biggest red flag.
Be the first to comment