Dogecoin Faces 76.65% Long Positions, Liquidation Risks Rise

Dogecoin, a popular cryptocurrency, has seen a significant portion of traders betting on its rise. According to recent data, 76.65% of traders on a major trading platform are holding long positions, indicating a bullish outlook for the cryptocurrency. This high concentration of long positions suggests that many traders expect the price of Dogecoin to increase in the short term. However, this optimism also raises concerns about potential liquidation risks. If Dogecoin fails to meet traders' expectations, it could trigger forced liquidations, adding further downward pressure on the market.

Technical analysis of Dogecoin's price action reveals that the cryptocurrency is currently testing a critical support zone around $0.1809. If this support holds, Dogecoin could potentially break through resistance at $0.208 and start a rally. However, if the price fails to maintain this support level, it could face deeper declines. Traders are advised to closely monitor this key level, as it will determine whether the price trend remains bullish or if a bearish reversal is imminent.

Network metrics for Dogecoin show relatively low daily active addresses and transaction counts, indicating that user engagement is not particularly strong at the moment. As of the 28th of March 2025, the network had 47,577 active addresses and just 14,020 transactions. This lack of engagement can limit the potential for sustained price growth, suggesting that without increased demand or activity, Dogecoin may struggle to break free from its current range despite bullish expectations in the futures market.

Liquidation data reveals that long positions are dominating the liquidations, with $5.53 million in long positions liquidated compared to just $421,680 in short positions. This indicates that the market is under pressure, with long traders facing forced exits as the price struggles to increase. The dominance of long liquidations suggests that the market is more vulnerable to a further decline rather than a surge in the short term.

The MVRV ratio for Dogecoin is at 0.546, indicating that the market price is slightly overvalued compared to its realized value. This suggests that the price may struggle to rise significantly without an increase in demand. Without new catalysts or increased investor interest, Dogecoin may face resistance at higher price levels, potentially leading to consolidation or downward pressure.

In summary, while the market sentiment for Dogecoin remains largely optimistic, the significant liquidation of long positions and weak market engagement suggest that a price surge is unlikely in the immediate term. The current technical levels, coupled with the overvaluation indicated by the MVRV ratio, further support this outlook. Traders should exercise caution and closely monitor key support and resistance levels to navigate the potential volatility in the market.