Dogecoin Building for a Breakout? Analyst Spots Key Signals Resembling 2021 Setup
Crypto analyst Joao Wedson has released new data-backed insights suggesting that Dogecoin (DOGE) may be approaching a major breakout moment — echoing conditions seen just before its explosive 2021 rally.
In a tweet outlining four key observations, Wedson calls DOGE the “king of memecoins” and hints that a surprise rally may be brewing beneath the surface.
Liquidity Build-Up and Historical Pattern
The first signal revolves around aggregated liquidation levels. According to Alphractal’s 500-day heatmap, a significant amount of short-side liquidity — roughly $380 million — is currently trapped around the $0.50 zone. Historically, when short positions stack up in this manner, DOGE has entered accumulation phases followed by strong upward moves.
DOGE/BTC Pair Approaching Support
Wedson also highlights the DOGE/BTC trading pair, which is nearing a long-term support level that previously preceded the 2021 breakout. The accompanying chart shows a repeated pattern of bounces along the same support trendline, with current price action showing potential for a new reversal.
“The DOGE/BTC pair is nearing a critical support — very similar to the setup before the 2021 rally,” Wedson notes.
Meme Index and Market Conditions Align
Additional bullish context comes from the Meme Index, which tracks the performance of the top 16 memecoins. The index is reportedly showing early signs of recovery following a prolonged downturn.
Despite this, overall open interest remains low (~$3.2B) and daily trading volume is modest ($12B) — both indicators of underheated conditions, which often precede volatile moves.
Market Cap Has Grown, But Speculation Remains Tame
Wedson also points out that the total memecoin market cap is now much larger than in 2021, yet trader engagement remains subdued. This divergence could present a unique setup where capital rotation flows back into DOGE, especially if momentum shifts out of large caps and into risk-on plays.
“DOGE and other memecoins could still surprise in 2025,” Wedson concludes.
Bottom Line
With massive liquidity built up, historical support levels holding, and market conditions eerily similar to the pre-2021 rally environment, DOGE may be quietly priming for a major upside move. For traders paying attention, the meme coin market’s quiet phase could be the calm before the next breakout storm.
Kosta has reported on cryptocurrency markets and blockchain infrastructure since 2020, bringing over six years of hands-on experience in the crypto industry built through daily tracking of markets, trends, and emerging blockchain developments. Specializing in Bitcoin on-chain analysis, institutional ETF flows, and digital asset price action, his work at Coindoo has been cited by other news agencies and consistently covers market developments with a focus on data-driven reporting across Bitcoin, Ethereum, Solana, and XRP. Over the years, Kosta has contributed to multiple crypto media outlets in different regions, authoring over 6,000 articles across the sector. His reporting spans cryptocurrency markets and the broader fintech industry, tracking not only price action but also the technological and regulatory forces shaping the ecosystem. To support his analysis, Kosta actively leverages on-chain data and metrics from leading platforms such as Santiment, Glassnode, and CryptoQuant, enabling deeper, evidence-based market insights. He believes in the power of transparency and the data that underpins the blockchain ecosystem. His academic background in Marketing Management from Denmark further complements his analytical approach, adding a strong understanding of communication strategy and content positioning to his work.
