Dogecoin (DOGE) Price Reclaims $0.17 Mark After a 6% Overnight Rally

Dogecoin price recovered the critical $0.17 mark with a 6% rally overnight. The recent price surge comes as China is open to meeting the U.S. for trade talks in Switzerland this weekend.

Dogecoin is now on the verge of catalyzing a breakout from the falling wedge pattern in the 4-hour chart.

Moreover, DOGE's bullish tailwinds, such as rising Dogecoin open interest and short liquidation risks from the derivatives market, could propel the chances of a $0.20 breakout this week.

Dogecoin Price Shows V-Shaped Recovery From 24-Hour Low

Dogecoin tries to witness a sudden turnaround after creating a 24-hour low near $0.1641. However, with a V-shaped reversal, Dogecoin makes a bullish comeback.

Trapped within a falling wedge pattern in the 4-hour chart, Dogecoin is making a positive turnaround within the pattern. The pattern has been formed over the past two weeks as the DOGE price trend contracts.

The swing lows, starting from April 2022, construct the lower boundary line, and the bullish peaks on April 26 and May 2 generate the resistance trend line.

At present, Dogecoin shows a bullish struggle to overcome the 200 EMA line close to the 61.80% Fibonacci level at $0.1729. With a higher price rejection, Dogecoin struggles to make its fourth consecutive bullish candle.

Nevertheless, the positive cycle has begun within the following wedge pattern, hinting at a potential retest of the overhead ceiling. The sudden recovery has limited the chances of a death cross event between the 50 and 200 EMA lines.

Furthermore, the MACD and signal lines have given a positive crossover, hinting at a trend reversal. The Dogecoin price prediction of the falling wedge breakout anticipates a jump to the $0.20 psychological mark.

Notably, the growing bullish sentiments around Dogecoin could extend the uptrend. The Fibonacci levels from the March 2023 low to August 2022 high paint the next potential price targets at $0.2299 and $0.2673.

U.S.-China Trade Meet and Post-FOMC Clarity Could Pump DOGE Prices

The upcoming Sunday meeting between the U.S. and China to renegotiate the trade deals and high tariffs has reportedly boosted the sentiment in the U.S. markets. This has fueled the recovery run in top altcoins, rendering a memecoin rally.

If the counterparties can renegotiate the trading terms, this could spark a recovery in global and crypto markets. This might pump Dogecoin beyond the $0.20 mark.

Furthermore, the broader market anticipates the FOMC meeting on May 7 to keep the federal rates unchanged. This will likely result in short-term volatility spikes in the crypto market.

However, once the market regains clarity, Dogecoin could regain strength to continue its rally.

DogeOS Funding Spurs Final Sentiment

Recently, DogeOS has secured an interesting funding of $6.9 million from Polychain. With the recent funding to DogeOS, the sentiment around the meme coin is surging back.

Historically, the movements in Dogecoin price trends show that short-term price spikes align with sentimental surges. Hence, this recent funding could help Dogecoin reach the $0.20 mark.

Short Liquidation Risks and Dogecoin Open Interest Rises

As Dogecoin gradually gains strength, the derivatives market is growing bullish on the meme coin. The DOGE open interest has increased by 1.45% to reach $1.69 billion. This reflects the increased traders’ interest in Dogecoin.

Furthermore, the open interest has increased to 0.0071%, signaling increased bullish sentiments. As bulls gradually dominate the derivatives field, the short liquidation risk grows.

As per the DOGE exchange liquidation map, the meme coin could witness a massive short liquidation of $10.96 million if Dogecoin reaches $0.1755. This could pump the Dogecoin price and increase the risk of a $13.65 million liquidation at $0.1761.