Dogecoin price is navigating a volatile phase as it hovers just above key support levels. After hitting a local high near $0.2, DOGE has trended downward, raising fresh doubts about the memecoin’s strength in the current market.

While leading cryptocurrencies like Bitcoin and Ethereum continue to consolidate, Dogecoin has struggled to maintain momentum. The asset risks erasing nearly all gains from the past 30 days unless it can break through critical technical barriers and absorb significant short liquidizations, estimated at over $500 million.

The coming days could be pivotal for determining whether DOGE stages a recovery or slides into a deeper correction.

$0.165 zone is critical

The Dogecoin price has been hovering near a key liquidation zone at $0.165, where leverage from traders has accumulated to over $500 million. This threshold is being highlighted as a pivotal point for a potential short squeeze.

Source: CoinMarketCap

To break higher, the price may need to dip below this level to trigger these liquidations, potentially also forcing out short positions.

Such a move could pave the way for a stronger rebound and propel the cryptocurrency to continue extending its upward trend.

This pushes the bulls towards targeting a return to $0.18 and eventually testing the $0.2 resistance again.

Technical signals remain weak

From a technical standpoint, the outlook for Dogecoin remains relatively weak. After failing to stay above its ascending trend line, DOGE has encountered sustained downward pressure.

The Ichimoku cloud’s conversion line is providing stiff resistance to the price, and there’s no indication yet of the price crossing above the cloud for a bullish technical crossover.

Moreover, the Stochastic RSI has reversed from testing average levels, highlighting the increasing influence of bearish sentiment, at least in the short term.

As the chart shows, DOGE is approaching a test of support at $0.162, an important level to watch out for. It’s located just below the $0.164 liquidation zone.

However, a failure to hold this support could lead to a steeper drawdown and traders might begin booking realized losses, which could have implications for the cryptocurrency’s long-term price trajectory.

$0.2 in 2025?

While Dogecoin reached as high as $0.2 earlier this year, the question now is whether it can sustain such levels or rise further in 2025.

For this to happen, the token must establish consistent upward momentum, clear resistance levels, and attract renewed interest from investors.

This seems like an uphill battle considering its current technical weakness and the absence of strong bullish signals.

Still, the high volatility of the crypto market could favour sharp movements in either direction. If the expected short squeeze materializes after testing the $0.162 support, DOGE may rally back towards $0.18 and $0.2.

But unless broader market conditions improve significantly and sentiment shifts decisively, reaching the $0.5 mark in 2025 appears increasingly unlikely based on current technical and fundamental data.

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