- Liquidity Grab in Play – Dogecoin is targeting a lower liquidity zone, setting up a potential reversal
- Demand Zone Reaction? – Watch for a liquidity sweep on lower timeframes before a possible bounce
- No Guarantees in Crypto – The market is unpredictable, so stay prepared for both bullish and bearish scenarios
Dogecoin is following the path we anticipated in the last analysis, with the price drifting lower toward an area loaded with liquidity.
But what’s next?
Are we about to see a major liquidity sweep before a reaction to the upside? Let’s break it down.
The Setup: Dogecoin Targets Lower Liquidity
In our previous Dogecoin analysis, we noted the abundance of liquidity sitting to the left of the chart—far more attractive than the liquidity resting above.
Now, the price is doing exactly what we expected: moving downward to clear out that liquidity pool.
On the H1 timeframe, we have an ideal scenario shaping up. Dogecoin is:
- Dropping lower while leaving liquidity above.
- Approaching a key demand zone.
- Likely to create smaller liquidity clusters on lower timeframes (M1/M3) before a potential liquidity sweep.
This setup suggests a classic liquidity grab, where the market takes out weak hands before a strong move in the opposite direction.
Zooming In: What to Watch on Lower Timeframes
If we drill down to the M1/M3 charts, here’s what we’re looking for:
- Price continues its descent, creating liquidity pockets above.
- Approaches the demand zone—this is the key area to watch.
- A final liquidity sweep—a sharp drop below recent lows, shaking out traders before a strong reaction upward.
If this plays out, we could see a bullish reversal from the demand zone, setting Dogecoin up for a strong move higher.
The Unpredictable Factor: What Could Go Wrong?
Of course, no setup is 100% certain.
Dogecoin could break through demand entirely if the selling pressure is too strong. That’s why risk management is key—always have a plan in case the market does something unexpected.
At the end of the day, Dogecoin will do what it wants, but this liquidity-based approach helps us stay ahead of major moves.
Final Thoughts: Smart Trading with Weex
No matter the setup, trading Dogecoin requires precision.
Platforms like Weex offer the tools needed to navigate liquidity zones with tight execution. Check them out if you’re serious about crypto trading.
Will Dogecoin sweep liquidity and bounce? Or is more downside ahead?
Disclaimer: The information provided in this article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. Any actions you take based on the information provided are solely at your own risk. We are not responsible for any financial losses, damages, or consequences resulting from your use of this content. Always conduct your own research and consult a qualified financial advisor before making any investment decisions. Read more
