Dogecoin’s [DOGE] recent fall could be beneficial for the asset as it could continue to move to the upside.

This rally would require a collective effort of the spot and derivative market traders to push the asset to the upside. Here’s how it could play out:

Key support level could shoot DOGE higher

Dogecoin has just traded into a key level on the chart, which is the ascending support line. This level could be a major catalyst for a price rally.

Image: TradingView

This level has been a major price catalyst in the past, which prompted the recent market high of $0.48. This time around, the rally would be within the range of $0.22 to $0.48 depending on market movements.

It’s essential to highlight that if Dogecoin manages to break above the $0.22 level, it could see further gains. Notably, the $0.38 level represents a significant target, as it houses a major batch of liquidity clusters in the market.

This potential progression further highlights the importance of DOGE maintaining its upward momentum to achieve this key milestone.

Buying interest and volume rises

There’s been growing interest in the derivatives market, with the Open Interest (OI)-weighted Funding Rate and the Volume-Weighted Funding Rate seeing a gradual market rise.

At the time of writing, the volume in the general market has surged by 16.12%, reaching $2.93 billion, while the option volume also climbed by 87.59% in the past 24 hours.

The Volume-Weighted Funding Tate combines market volume and Funding Rate to provide a more precise sentiment analysis. Standing at 0.0071% at press time, it suggests the potential for continued market growth in the coming days.

Meanwhile, the Open Interest-Weighted Funding Rate is also positive, showing the same reading of 0.0071%.

This indicates that unsettled contracts in the market are predominantly held by long traders, hinting at a possible upward movement in the market.

With the growing volume and OI rising, it implies that the current Long trades in the market are backed by major buying volume, which could have an impact on the asset seeing a price jump.

Spot market momentum adds to the potential jump

The recent rise in trading volume appears to be driven by spot traders, who have purchased $8.9 million worth of DOGE. This follows several consecutive days of buying activity.

If spot market buying volume continues to increase in the coming days, the DOGE rally could gain significant momentum. Such momentum may accelerate its progress toward the intended price target.

The Long-Short Liquidation Ratio compares buyer and seller losses in the market. It indicates a higher number of sellers.

Currently, sellers have incurred losses totaling $630,000. In contrast, Long traders have recorded comparatively lower losses.

This suggests increased buyer activity in the market. Buyers appear willing to pay a premium, potentially driving a price surge.