Dogecoin enters consolidation—How THIS group can stir a DOGE breakout

A high liquidation zone for Dogecoin lies at $0.27, which could cause a short squeeze.
If these positions are wiped out, the ensuing liquidations could aid a breakout from consolidation.

Dogecoin [DOGE]has been under bearish pressure after dropping by 20% in seven days. At press time, the largest memecoin was trading at $0.264, with a market capitalization of $39 billion.

Despite bears remaining in control, the volatility that rocked Dogecoin earlier this week is waning and forcing the memecoin into consolidation.

However, a liquidation cluster hovering above the current price could act as a magnet zone that will push DOGE higher.

Analyzing Dogecoin’s liquidation heatmap

Dogecoin’s liquidation heatmap with a 24-hour look back period shows a cluster of liquidations at $0.272.

If DOGE rises to this level, many short sellers will be at risk of liquidation.

Source: Coinglass

Short sellers close their positions by buying. If DOGE rallies and these positions are closed, it could ignite buying pressure that will stir a rally.

Moreover, the influx of long liquidations earlier this week cleared out liquidation clusters below price. Even if DOGE fails to attract fresh buying to surge to $0.27, the reduced liquidation risk of long positions could force it into consolidation.

At the same time, Funding Rates have flipped back to positive per Coinglass, indicating that long traders are willing to pay short traders to maintain their positions.

The rising demand for long positions indicates a bullish sentiment.