Dogecoin Caught Between Liquidity Zones—What the Liquidation Heatmap Reveals About the Next Move

Dogecoin has stalled near a critical technical threshold, caught between overhead resistance and underlying support. With the current price hovering around $0.15 (down 3.43% on the day), the liquidation heatmap paints a clearer picture of the struggle between buyers and sellers. Technical structure, momentum exhaustion, and concentrated liquidity clusters are now converging, creating conditions for either a sharp reversal or continued consolidation.

Liquidity Positioning Explains Recent Price Swings

The liquidation heatmap reveals the true driver behind Dogecoin’s erratic price action over recent weeks. Dense liquidity bands cluster below current levels around $0.121–$0.123, acting as a magnet for stop-hunt sweeps. When leveraged traders place protective stops in these zones, a coordinated push lower triggers cascading liquidations that artificially extend downward pressure.

Recent price advances toward $0.129 cleared shorts before reversing sharply—a textbook stop-hunt. Price then descended to target long-side stops, confirming the pattern. Liquidity above price remains thin, meaning sustained upside requires fresh buying pressure rather than mere short-covering.

Market makers cycle prices between liquidity clusters to reset leverage positions. The liquidation heatmap shows this isn’t accidental; it’s structural. A controlled sweep of lows followed by stabilization could support a bounce, while rapid continuation would signal forced liquidations cascading higher.

Technical Structure: Consolidation Beneath Descending Channel

Dogecoin has consolidated within a clearly defined horizontal base ranging from $0.12 to $0.13 for months. On the 12-hour timeframe, repeated rejections beneath a descending trendline confirm persistent overhead resistance. Each recovery attempt stalls before reaching dynamic resistance, keeping price confined within a bearish channel.

The multiple tests of this base suggest growing demand absorption and reduced selling conviction. However, price compression alone doesn’t guarantee directional resolution. The descending trendline that has guided lower highs since October remains a formidable barrier. A confirmed close above this resistance would shift the short-term structure and potentially open the path toward $0.21—the next major technical target if momentum follows through.

Momentum Signals Mixed: RSI Exhaustion Without Clear Bullish Divergence

The relative strength index hovers around 28–30, technically oversold territory. Historically, similar RSI levels have preceded relief rallies when price aligned with channel support. This reading indicates seller exhaustion rather than strong accumulation intent.

What’s notable is the absence of a bullish divergence. Earlier cycle bottoms formed clear RSI lows while price made new lows—a classic reversal setup. This time, momentum remains subdued, reflecting cautious participation rather than aggressive buying. Throughout 2025, RSI has consistently failed to reclaim the 50 midline, confirming bearish market control.

Momentum indicators do show early signs of an uptrend forming even as price remains in a downtrend. This divergence increases the probability of a trend reversal, but confirmation requires follow-through volume. Without buying force, any upside attempt risks rejection near previous resistance levels.

The Setup: Volatility Compression Before the Move

Narrowing volatility combined with oversold readings and liquidity concentration creates a pressure-cooker environment. Market participants anticipate a decisive resolution, but the direction remains uncertain. The liquidation heatmap shows stop clusters above and below current levels, meaning whichever way Dogecoin breaks, liquidations will likely accelerate the move.

A breach of the descending trendline with volume would target $0.21. A breakdown toward lower liquidity zones would test the $0.12 base. The current $0.15 price represents a temporary equilibrium point—neither capitulation nor conviction, just compressed volatility waiting for a catalyst.