Is shorting DOGE profitable while active addresses soar

• Dogecoin price retraces after running into immense overhead pressure at $0.1600.
• This intensifying overhead pressure might curtail DOGE’s anticipated move to $1.0000.
• Positive pressure behind Dogecoin’s rally will likely sabotage calls for a retracement to $0.1000.

Dogecoin price is exchanging hands at $0.1312 after slowing down its uptrend marginally below $0.1600. The largest meme coin and now the eighth largest cryptocurrency boasts $17 billion in market capitalization after attracting $130 billion in trading volume over the last 24 hours.

DOGE’s fading momentum comes amid a crypto relief rally that saw Bitcoin price trade at $21,302 on Saturday. If Dogecoin does not clear resistance at $0.1600, investors can lock in profits as discussed by one of our analysts and focus on other trending assets like BTC, ETH and BNB.

What’s next for Dogecoin price?

It has yet to be determined if Dogecoin price has enough liquidity and momentum to break the stubborn resistance at $0.1600. This overhead pressure might drive DOGE to validate a potential double-bottom pattern. However, sellers will have to build an overwhelmingly bearish case for such a move.

For now, Dogecoin price trades at $0.1304 and can hold above higher support areas due to the support it is receiving from day traders. According to the On-Balance-Volume (OBV) indicator, more people are backing DOGE’s potentially bullish climb toward $1.000. Approximately $17.76 billion is being exchanged at the moment, with positive pressure accounting for most of the volume.

DOGEUSD 3-day chart

A buy signal from the Moving Average Convergence Divergence (MACD) adds optimism to the bullish outlook in Dogecoin price. Furthermore, the MACD’s uninterrupted northbound move above the mean line reveals that buyers have the upper hand for now.

A daily close above the critical hurdle at $0.1600 could quickly pave the way for DOGE to begin the subsequent phase of its journey to $1.0000. Dogecoin’s downside appears to be holding onto solid support between $1101 and $1141, as highlighted by IntoTheBlock in the IOMAP on-chain model. Approximately 9,500 addresses purchased 9.25 billion DOGE in that range.

Dogecoin IOMAP model

Due to the massive buying pressure between $0.1101 and $0.1141, Dogecoin will likely keep the uptrend intact. In sudden short-term retracements, declines might not stretch beyond the same range. Although short positions might be profitable, traders must exercise caution because rebounds could wreck their positions.

Dogecoin’s network activity has been on its toes since Elon Musk acquired Twitter. Investor interest in DOGE peaked, bolstered by Musk’s hint at integrating Dogecoin into Twitter. For this reason, on-chain data by Santiment exhibits a seemingly unstoppable uptick in the protocol’s daily active addresses.

Dogecoin Active Addresses

From the chart above, 104,000 addresses transacted on the network on November 4, almost touching August’s peak at 116,000. The fundamental support Dogecoin is getting from its holders remains crucial for its uptrend to $1.0000.