- DOGE financing rates fell, indicating a decline in traders’ optimism.
- The price could trade between $0.15 and $0.18 in the short term.
Since April 2, Dogecoin’s [DOGE] The financing level has remained at an extremely low level. The last time the statistic was at the mentioned level was around February 1.
For those unfamiliar, the funding rate is the cost of keeping a perpetrator position open. If funding is positive, it indicates strong interest in long-leverage trades.
But if the outcome is negative, it means that traders’ sentiment is bearish and short positions are dominant.
Confidence diminishes when DOGE falls
In the case of Dogecoin, the funding was not negative.
However, having a very low positive value suggested that the bullish bets were mild and that traders did not expect the coin’s value to reach astronomical points any time soon.
At the time of writing, DOGE was exchanging hands at $0.15, thanks to the price crash over the past two days. If funding continues to decline while DOGE’s price follows suit, longs may not receive any rewards.
Source: Santiment
Price-wise, this trend could be bearish, and the coin could see more downside. Beyond this metric, AMBCrypto analyzed liquidation levels.
Liquidation levels represent estimated prices where major liquidation events may occur.
Liquidation occurs when a trader’s position is forcibly closed because he can no longer meet the requirements to keep a position open.
This may be due to an insufficient margin balance. In other cases, the breakdown could be the result of high leverage in a context of high market volatility.
DOGE to wait for Bitcoin
At the time of writing, Dogecoin lacked high liquidity between $0.15 and $0.18. This indicated that the price of the coin may not be moving in that direction yet.
Therefore, traders who decide to open long positions at this time may risk going bankrupt. However, the Cumulative Liquidation Levels Delta (CLLD) showed a different signal.
For context, a positive CCLD indicates that there are more long liquidation levels. On the other hand, a negative value indicates an increase in the number of short liquidations.
Source: Hyblock
At the time of writing, DOGE’s CLLD was negative. But for the price, this reading offers a bullish bias. The trend shown by the indicator shows that late shorts are being punished as they try to catch the dip again.
So the price may drop slightly. But a rebound could not be far away in favor of longs. Despite this statement, traders may need to be cautious.
Read Dogecoins [DOGE] Price forecast 2024-2025
For example, the fourth Bitcoin [BTC] Halving would occur within six to seven days. History shows that prices fluctuate a lot in the run-up to the event.
As such, Bitcoin may not be the only cryptocurrency that could be affected. DOGE and others may also experience serious fluctuations.