Key Takeaways
The price action of Dogecoin signaled a potential bottom from the TD Sequential indicator. Buyers were stepping up their positions inside the 5-wave move.
Dogecoin [DOGE] maintained its position among the top ten coins by capitalization, ahead of all other memecoins.
The memecoin has already begun making inroads on Wall Street, driven by pending ETF approvals and growing excitement around upcoming crypto treasury initiatives.
However, despite the buzz, CleanCore Shares dropped following their announcement of a DOGE-backed treasury, unlike other crypto treasuries that saw positive momentum.
At the time, most cryptocurrencies, including DOGE, were undergoing a correction. Still, signs pointed to an impending shift in market sentiment.
Dogecoin flashes ‘buy signal’
Lower time frame charts were signaling a potential bottom for Dogecoin around the $0.21 level. This came shortly after the TD Sequential indicator successfully identified a local top just above $0.22.
This signal is noteworthy, as lower time frames often lay the foundation for larger trends, though they ultimately move in the direction of the higher time frames.
If DOGE maintains its current structure, the price could rebound and trade above $0.22, possibly extending higher.
However, a breakdown below the support zone could invalidate the setup and delay the expected short-term recovery.
Source: Ali Charts/X
The larger timeframe chart aligned with the hourly chart, reinforcing the overall trend. According to Trader Tardigrade’s post, the 2-week chart had broken out above a 5-wave descending broadening wedge.
After breaking out of the 5-wave pattern, the price now appears to have successfully retested the breakout level.
The RSI was just above the neutral level from an oversold zone, as of writing, indicating potential continuation.
The market sentiment from whales and retail supported this outlook per Market Prophit on X.
Sentiment readings for the crowd and Smart Money were 0.15 and 0.36, respectively. The low values meant that the belief was moderately optimistic.
How liquidity and volume are key for the next move
The liquidity levels showed that more than $10 million was sitting right below $0.214, with less dense clusters above the current price action. The turnaround followed after the price swept liquidity above $0.214.
Aggregated Orderbook Liquidity Delta was green on the day, per CoinGlass data. This further indicated that buyers were increasingly longing for the memecoin following the price action signal.
Source: CoinGlass
Token trading volume was also recovering from the dip that followed July’s peak value of $89 billion.
At press time, this metric was at $14 billion, slightly higher than previous days of the week per Token Terminal.
The main factors contributing to this volume were the spot orders from whales and retail. They have been accumulating, but retail seemed to be doing more as per CryptoQuant data.
