Dogecoin faces big test at $0.25 – DOGE can break through IF…

• DOGE gained bullish momentum as market liquidity surges after Trump’s tweet.
• Is this a short-term blip or the start of a long-term trend?

Dogecoin [DOGE] surged 15.76% in a single day, recovering its weekly losses and breaking past the $0.20 level. 

The sharp rally was driven by whale accumulation, with an additional 140 million DOGE added to major holdings. 

With both macro and on-chain signals aligning, DOGE faces a key test: can it sustain the uptrend and establish $0.20 as a support level?

DOGE eyes rebound amid bullish signals

On its 1-day chart, DOGE has retraced over 50% of its post-election gains, forming three consecutive lower lows and trading at $0.227 at press time. 

Despite the pullback, technical indicators point to a potential reversal. 

The RSI is bottoming out, signaling oversold conditions, while a bullish MACD crossover suggests growing upside momentum. Whale accumulation further strengthens the bullish case.

Plus, volume has spiked 252% to $3.71 billion, reinforcing buying pressure.

Source: TradingView (DOGE/USDT)

Additionally, rising global liquidity – driven by another “Trump pump”- has liquidated $10.10 million in short positions, easing selling pressure.

DOGE now approaches the critical $0.25 resistance, with a breakout potentially confirming further upside.

However, with the crypto market cap surging 8% to reclaim $3 trillion, the key question remains: Is DOGE’s surge merely a short-term reaction to increased liquidity following the Trump-driven market boost?

A relief rally or a sustained uptrend?

As of this writing, DOGE has pulled back 7.66% from its 15.76% single-day surge to $0.242.

A strong red candlestick is taking shape, signaling increased selling pressure and adding to AMBCrypto’s uncertainty about a confirmed bullish breakout.

In derivatives, Open Interest (OI) has surged by 10.57% to $2.03 billion, highlighting increased speculative activity.

However, with weak spot demand, DOGE faces the risk of a long squeeze. Overleveraged positions could trigger cascading liquidations of approximately $280 million across both long and short positions.

Source: Coinglass

The coming days will be pivotal. If market buyers lock in profits, DOGE risks turning its recent rally into a “sell-the-news” event. This makes a decisive hold above $0.20 uncertain, as longs face liquidation risks.

On the flip side, a breakout past $0.25 is crucial to force short-covering and extend the rally’s momentum.

At press time, OI has declined by over 4%, signaling that futures traders are unwinding positions after securing profits. This increases sell-side liquidity.

For bulls, spot demand is key – if they step in, DOGE could consolidate in a holding pattern. Otherwise, a dip below $0.20 remains a looming risk.