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Dogecoin jumps 44% in one day as traders rotate Shiba Inu profits into DOGE

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Dogecoin (DOGE) soared on Oct. 28 amid massive capital rotations out of its top meme coin rival’s market, Shiba Inu (SHIB).

Notably, DOGE’s price rallied by a little over 44% to reach its intraday high of $0.3449. Its gains appeared in contrast to SHIB’s losses in the same period. On the other hand, the so-called “Dogecoin killer” dropped almost 28% to log an intraday low at around $0.000057; in the same hour, DOGE printed its daily top.

SHIB/USD vs. DOGE/USD daily price chart noting inverse correlation. Source: TradingView

The sudden price rally also pushed DOGE’s market capitalization to over $40 billion, a mettle that Shiba Inu achieved hours before, with the two cryptocurrencies now neck-and-neck and currently battling for the ninth place by market cap.

Traders started flocking into Dogecoin markets hours after Elon Musk, CEO of Tesla and SpaceX, posted a new tweet about the meme cryptocurrency. 

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Musk’s earlier supportive tweets prompted DOGE to climb by more than 1,500% in the first five months of 2021.

Long DOGE, short SHIB

Shiba Inu rallied exponentially heading into Q4, rising by around 1,200% in October on hopes that it would gain a listing on Robinhood, a United States-based zero-fee trading app, and its foray into the emerging decentralized finance and nonfungible token sectors with new product launches.

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Nonetheless, SHIB’s supersonic bull run has also made it overvalued, based on some key metrics, notably the Relative Strength Index. Thus, it appears that spot and derivative traders have decided to secure and/or rotate their profits. 

Su Zhu, co-founder, CEO and chief information officer of fund management firm Three Arrows Capital, noted earlier on Thursday that traders rotated their easy-to-short Shiba Inu perpetual swap profits — as SHIB topped out at $0.00008854 — into the Dogecoin perpetual market.

The former Deutsche Bank trader suggested that DOGE can rally toward $0.88 next should traders rotate profits from SHIB to Dogecoin. 

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Around $20.8 million DOGE rekt

Dogecoin’s price moves also caught derivatives traders off-guard as they lost about $20.8 million in total liquidations across the previous 24 hours. Around $18.17 million worth of those liquidations emerged out of leveraged long bets after DOGE’s price dropped to its weekly low of $0.2179 on Wednesday.

In contrast, the ongoing 12-hour timeframe saw bears taking more losses than bulls, with $8.9 million worth of bearish Dogecoin bets getting liquidated against $5.22 million worth of bullish bets concerning the same token.

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DOGE total liquidations across all exchanges. Source: Bybt 

On the whole, however, Dogecoin traders were the majority short in the previous 24 hours, with FTX and OKEx users turning out to be exceptionally bullish, with 58% and 77% of their net positions skewed long, respectively.

A sudden bearish reversal in the Shiba Inu market also led to SHIB liquidations worth $31.41 million, the third-highest among all cryptocurrencies in the previous 24 hours.

PostyXBT, an independent market analyst, warned about excessive leverages in both SHIB and DOGE markets. 

“Play spot and not leverage,” he said, adding, “The volatility could quite easily wipe out before a big move in intended direction.”

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Dogecoin price locked in downtrend as DOGE bears take the wheel

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  • Dogecoin price is locked within a bearish continuation pattern as buyers are nowhere to be found.
  • Unless DOGE escapes above $0.208, the meme token could continue to trend lower.
  • Slicing below $0.176 might spell even more trouble for the bulls.

Dogecoin price is sealed in a consolidation pattern as DOGE fails to galvanize investors’ enthusiasm. Until the canine-themed token is able to overcome a flurry of obstacles with the final hurdle at $0.23, the meme token may continue to be trapped within a downtrend.

Dogecoin price confined in tight range

Dogecoin price is trapped within a descending parallel channel on the 4-hour chart, as DOGE continues to print lower highs and lower lows. The meme token is attempting to recover following the swing low at $0.186 on November 26 but is confronted with the first area of resistance at the middle boundary of the governing technical pattern at $0.208.

Unless Dogecoin price is able to slice above the aforementioned hurdle, DOGE may continue to consolidate. The dog-themed token may discover its first line of defense at the 78.6% Fibonacci retracement level at $0.199, then at the September 26 low at $0.193.

An additional foothold may arise at the local bottom at $0.186 before Dogecoin price tags the lower boundary of the prevailing chart pattern at $0.176.

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Investors should note that if DOGE falls below the downside trend line of the parallel channel, an ultimate bearish narrative of a 22% downswing toward $0.137 may be unraveled for Dogecoin price, a pessimistic target given by the governing technical pattern.

DOGEUSDT

DOGE/USDT 4-hour chart

To reverse the period of sluggish performance, DOGE bulls should aim to slice above the middle boundary of the prevailing chart pattern at $0.208. Additional resistances may appear at the 21 four-hour Simple Moving Average (SMA) at $0.213, then at the 50 four-hour SMA at $0.221.

Another stiff hurdle may emerge at the 61.8% Fibonacci retracement level at $0.232, coinciding with the resistance line given by the Momentum Reversal Indicator (MRI) and the upper boundary of the parallel channel.

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Escaping above the topside trend line of the governing technical pattern could see the meme token’s momentum shift to the upside, potentially targeting bigger aspirations. However, Dogecoin price must also overcome the 100 four-hour SMA at $0.236 and the 200 four-hour SMA which intersects with the 50% retracement level at $0.254 for an attempt to recuperate recent losses. 

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Dogecoin Price Analysis: DOGE breaks September low, finds support at $0.186

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  • Dogecoin price analysis is bearish today.
  • DOGE/USD lost over 18 percent from the last high.
  • Support was found at $0.186.

Dogecoin price analysis is bearish today as we expect further tests of downside to follow after a slight recovery from the $0.186 low. Likely, DOGE/USD will not react higher for long as sellers are still strong in the market.

Dogecoin Price Analysis: DOGE breaks September low, finds support at $0.186 1
Cryptocurrency heat map. Source: Coin360

The market overall saw bearish momentum return over the last 24 hours. The market leader, Bitcoin, declined by 7.56 percent, while Ethereum lost almost 9 percent. Meanwhile, Dogecoin (DOGE) follows, with a loss of a little over 5 percent.

Dogecoin price movement in the last 24 hours: Dogecoin drops overnight, finds support at $0.186

DOGE/USD traded in a range of $0.1954 – $0.2288, indicating strong volatility over the last 24 hours. Trading volume has increased by 87.15 percent, totaling $2.36 billion, while the total market cap trades around $26.88 billion, ranking the coin in 10th place overall.

DOGE/USD 4-hour chart: DOGE looks to recover today’s loss

On the 4-hour chart, we can see the Dogecoin price action reacting higher after further downside was rejected over the last hours.

Dogecoin Price Analysis: DOGE breaks September low, finds support at $0.186
DOGE/USD 4-hour chart. Source: TradingView

Dogecoin price has seen continuous decline so far in November. After a spike to $0.34 at the end of September, DOGE/USD saw a strong reversal over the following days.

Since then, a series of lower lows and highs have been set until the $0.215 mark was reached on the 18th of November. The support prevented further downside for more than a week, while lower highs were still being set.

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Yesterday, we saw the Dogecoin price set lower high again before starting to rapidly move lower. The $0.215 support was finally broken earlier today, leading to the $0.186 set as the new low. Over the past hours, a slight reaction higher followed, however, we should see DOGE/USD retest the low later today. 

Dogecoin Price Analysis: Conclusion 

Dogecoin price analysis is bearish today as we expect further downside to be tested after the current reaction higher ends. Likely we will see DOGE/USD look to retest the newly set low as sellers are still active. 

While waiting for Dogecoin to move further, see our articles on the Best Crypto Wallet 2021, Decred Wallet, and Ripple vs SEC.

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Whales Are Buying Dogecoin According to Smart-Contract Activity

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Dogecoin on-chain activity suggests that traders might be trying to enter the coin at lows

The smart contract activity is one of the indirect ways of determining the number of actions that take place on-chain of one or another asset. In the case of Dogecoin, it has entered the top 10 most actively used smart contracts on the Ethereum chain. 

According to the provided data, Doge took 7th place among the most actively interacted smart contracts on the chain. The meme-coin shared the top with coins like Binance Smart Chain, Binance USD and Chia Coin.

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The usage of smart contracts usually implies increased buying activity since, in order to utilize a coin’s smart contract, users have to own a certain amount of tokens or coins.

While Doge’s on-chain data suggest that more people are starting to use it, the market data suggests the opposite. According to TradingView, Doge/USD trading pairs are losing up to 10% of their value.

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At today’s low, Doge reached 15% in certain hours and tested the $0.188 support. The last time Dogecoin was trading at the same level was back at the end of September. Rapid growth in coins’ value was followed by the overall bullish cycle on the cryptocurrency market.

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