The sentiment surrounding Dogecoin (DOGE) is largely bullish, with a significant portion of traders betting on the cryptocurrency’s price rise. However, despite this optimism, the market faces heightened risks of volatility, especially due to the dominance of long positions and key technical resistance levels. Traders who expect a surge could see their positions liquidated if the market fails to meet their expectations.

Long Positions Dominate Market Sentiment

Currently, 76.65% of traders on Binance Futures are holding long positions on Dogecoin, indicating a strong belief that its price will rise. While this reflects a bullish sentiment, it also raises concerns over the potential for forced liquidations if the price fails to increase as expected. A high concentration of long positions can lead to increased volatility, as any negative price movement could trigger widespread liquidations, putting downward pressure on the market.

Technical Analysis: Support and Resistance Levels

At the time of writing, Dogecoin is trading at $0.1809, showing a 7.96% decline in the last 24 hours. This price action suggests that Dogecoin is testing a critical support zone around this level. If this support holds, DOGE may rise past resistance at $0.208, signaling the potential for a rally. However, if the price falls below this support, the cryptocurrency could experience further declines, making this level crucial in determining the next price movement.

Network Metrics: Weak User Engagement

Looking at Dogecoin’s network activity, the data paints a less optimistic picture. The daily active addresses and transaction count remain relatively low, with 47,577 active addresses and just 14,020 transactions recorded on March 28, 2025. This indicates that user engagement is not particularly strong, which could limit the cryptocurrency’s ability to sustain long-term price growth. Without a significant increase in demand or network activity, Dogecoin might struggle to break out of its current price range, despite the bullish sentiment in futures markets.

Liquidation Data: Long Positions at Risk

The liquidation data for Dogecoin indicates that long positions are under significant pressure. As of the latest data, $5.53 million worth of long positions have been liquidated, compared to only $421,680 in short positions. This suggests that the market is currently vulnerable, with long traders facing forced exits as the price struggles to rise. The dominance of long liquidations increases the likelihood of further downward pressure, making it less likely for Dogecoin to experience an immediate surge.

MVRV Ratio: Slightly Overvalued

The MVRV (Market Value to Realized Value) ratio for Dogecoin currently stands at 0.546, suggesting that the market price is slightly overvalued relative to its realized value. This overvaluation indicates that Dogecoin might struggle to rise significantly without a corresponding increase in demand or investor interest. Without fresh catalysts or a shift in market sentiment, Dogecoin may face resistance at higher price levels, and its price may continue to consolidate or experience downward pressure.

Conclusion: Potential for Short-Term Struggles

Despite the overwhelming long positions and bullish sentiment in the market, Dogecoin faces significant challenges. The dominance of long liquidations and the overvaluation indicated by the MVRV ratio suggest that Dogecoin is unlikely to experience a significant price surge in the short term. Traders should remain cautious, as the market’s current dynamics indicate that any price increase may be short-lived unless new catalysts or stronger market engagement emerge.