Dogecoin Price Forecast: SHORT Traders Face $20M Losses if this Happens

Dogecoin (DOGE) price surged above $0.17 on Monday, March 25, up 58% within the monthly time frame. On-chain data shows that thousands of new users trooping into the Dogecoin network following Elon Musk’s recent payments licensing move.

With SHORT traders desperate to avert over $20 million in losses can DOGE price maintain an upward momentum in the week ahead?

10,000 New Users Joined Dogecoin Ecoystem in the last 3-days

After struggling for demand in Mid-March, Dogecoin price swung into an upward trajectory on March 20, as markets reacted to Elon Musk Twitter/X Payments LLC arm announced the acquisition of operational licenses in 3 US states.

DOGE price bounced 30% from $0.12 to $0.16 within the 24 hours of the news, as the Dogecoin ecosystem reacted positively to yet another bullish Elon Musk  narrative.

However, at press time on March 25, Dogecoin has now stretched its gains even further above $0.17 territory, sparking hopes of a prolonged price uptrend.

On-chain data shows that beyond the Dogecoin existing holders’ positive reactions, new entrant trooping into the ecosystem are adding more depth and intensity to the market demand.

Santiment’s Total Amount of Holders chart below tracks the net-growth in the number of new funded wallets created on a blockchain network. It serves as proxy for measuring growth in user acquisition and active investor base.

Dogecoin funded wallets have increased by 70,000 addresses in the March 2024 hitting 6.58 million active wallets as of March 25. Notably, 10,000 of those have funded their wallets in the last 4-days,  in aftermath of X Payments’ license acquisition.

An increase in funded wallets not only means increase in number of users, but it is also a bullish indicator of fresh capital flowing into the ecosystem.

It appears that X Payments’ license acquisition has stirred up optimism that Dogecoin could achieve global adoption surge if Elon Musk’s fulfills the long-term proposition to integrate DOGE into Twitter/X.

Historical, also shows that DOGE price action has been closely and positively  correlated to the changes in the number of funded wallets. Hence, strategic traders will keep an eye on the future developments surrounding this event.

Dogecoin (DOGE) price forecast: SHORT Traders to Lose $20M if DOGE breaks above $0.20

In the near-term, if the Dogecoin network continues to adds to its 70,000 newly-funded wallets, DOGE price could head toward the $.20 target in the week ahead.

However, Coinglass Liquidation map shows that the bears could mount a significant sell-wall at the $0.18 territory.

As seen below, SHORT traders currently have over $20 million leveraged futures contracts due to be liquidated if Dogecoin price surges above $0.18.

To avoid booking such large losses, the bears could activate tight stop-loss orders in the coming days. The sell pressure could in advertently slow down the DOGE price ascent.

But if the new entrant keep bringing in fresh capital as observed above, Dogecoin could attract sufficient demand to scale the looming sell-wall at $0.18, and potentially drive the rally above $0.20 as predicted.

But if the SHORT traders’ top-loss orders triggers an outsized bearish market reaction, Dogecoin price stands the risk of major downswings below $0.15.

However, this outcome seems unlikely, as the bulls currently hold leveraged positions worth over $65 million that could get triggered if price fall $0.16 price level.