Dogecoin is currently experiencing a phase of consolidation, having settled into a narrow trading range after a notable liquidity sweep that pushed its price into a robust demand zone between $0.12 and $0.13. Following a sharp decline, the price found support at this critical level, leading to a sideways movement instead of breaching lower.
The recent price action reflects a defined sequence: an initial bullish rally was succeeded by a corrective drop that triggered stop-loss orders beneath previous support levels, eventually leading to stabilization. After the liquidity flush, Dogecoin established a base, consistently defending this demand zone. Observations indicate that candle sizes have diminished, and volatility has decreased compared to the preceding selloff, indicating that aggressive selling has likely subsided.
At present, Dogecoin is caught in a constricted range characterized by relatively flat highs and lows, all while remaining above the $0.12 to $0.13 demand zone. Resistance levels are identified between $0.18 and $0.20 based on earlier trading activity, although the asset has not yet tested these thresholds. This tightening range is indicative of compression; however, it is important to note that this scenario represents consolidation rather than a breakout or breakdown.
The current situation is significant as it illustrates Dogecoin”s transition from a phase of volatile selling to a more balanced interaction between buyers and sellers. If the asset can maintain its position above this demand zone following the liquidity sweep, it would imply that selling pressure has been effectively absorbed. Conversely, failing to uphold this support could reopen the possibility of further downside risk. The manner in which Dogecoin navigates this tight range will be critical in determining its future trajectory.
