Dogecoin (DOGE) Price Surge Signals Potential Breakout From Wedge Pattern

China's willingness to meet Switzerland later this week to discuss a potential trade deal with the U.S. has brought positive developments.

Dogecoin is poised to breakout from a descending wedge pattern, which usually signals an upcoming price increase.

Other positive sentiments such as increased open interest in Dogecoin and the risk of liquidation of short positions also support DOGE's chances of breaking the $0.20 mark this week.

Dogecoin Price Shows V-Shaped Recovery

Dogecoin is trying to bounce back after previously printing a daily low around $0.1641. However, thanks to the V-shaped reversal, DOGE showed a positive recovery.

Currently, Dogecoin is still trapped in a descending wedge pattern on the 4-hour chart. This pattern has formed over the past two weeks as the DOGE price trend has narrowed.

The lower boundary of the pattern is defined by the lowest swing since April 2022, while the resistance line is formed from the price peaks on April 26 and May 2.

Currently, Dogecoin is struggling bullishly to break the 200 EMA line which is near the 61.80% Fibonacci level at $0.1729. The high selling pressure made it difficult for DOGE to form its fourth consecutive bullish candle.

However, a positive cycle has started within the wedge pattern, indicating a potential retest of the upper boundary of the pattern. This sudden recovery also reduces the likelihood of a “death cross” pattern between the 50 and 200 EMA lines.

The MACD technical indicator also shows a positive signal with an upward crossover, signaling a potential trend reversal. Dogecoin price predictions from this wedge pattern breakout point to a psychological target of $0.20.

Furthermore, the growing bullish sentiment towards Dogecoin could extend the uptrend. Based on Fibonacci levels, the next price targets are at $0.2299 and $0.2673.

US-China Trade Talks and Post FOMC Clarity Could Push DOGE Prices Higher

The meeting between the United States and China that will be held on Sunday to renegotiate trade agreements and high tariffs has increased positive sentiment in the US market. As a result, major altcoin markets have seen a recovery, including price spikes in memecoins like Dogecoin.

If both parties manage to reach a new trade deal, then a recovery in global and crypto markets is highly likely. This could potentially push the Dogecoin price beyond the $0.20 mark.

In addition, the market is generally looking forward to the outcome of the FOMC meeting on May 7, which is expected to keep the benchmark interest rate fixed.

This decision may spark short-term volatility in the crypto market, but once clarity is achieved, Dogecoin has a chance to rally again.

DogeOS Funding Drives Bullish Sentiment

Recently, DogeOS received $6.9 million in funding from Polychain. This funding has again lifted the positive sentiment towards Dogecoin amidst a resurgent memecoin market.

Historically, Dogecoin price trends have often reflected short-term spikes in line with improved sentiment. Therefore, this latest funding could be a catalyst for DOGE to reach a price of $020.

Risk of Short Liquidation and Rise in Dogecoin Open Interest

As Dogecoin gradually rallied, the derivatives market showed increasingly bullish signals towards it. DOGE’s open interest rose by 1.45% to reach $1.69 billion, reflecting traders’ increasing interest in Dogecoin.

In addition, the open interest ratio also rose to 0.0071%, indicating increased positive sentiment among investors. With the dominance of bulls starting to show in the derivatives market, the risk of liquidation of short positions has also increased.

Based on the DOGE exchange liquidation map, Dogecoin could potentially experience a massive $10.96 million short liquidation if the price reaches $0.1755.

If the price continues to rise to $0.1761, the liquidation risk could jump to $13.65 million, which could push the

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