Crypto analyst Kevin (@Kev_Capital_TA) has shared a compelling chart that overlays the Global Liquidity Index (yellow, plotted above) with Dogecoin’s price action (candlesticks in purple, plotted below). This visual comparison draws attention to several parallel channels and key trend lines that have historically aligned with crucial turning points in Dogecoin’s trajectory.
Explosive Dogecoin Setup Amid Liquidity Shift
While the Global Liquidity Index has traded within a downward sloping channel—its lower boundary consistently marking local lows highlighted by orange circles—the price of Dogecoin has successfully broken out and retested a long-term sloping trend line that dates back to its explosive surge in early 2021.
The chart illustrates Dogecoin’s extraordinary ascent from below one cent in 2020 to its record peak around $0.74 in 2021, before retreating to what seems to be a robust support level at approximately $0.15. The Fib retracement overlay indicates the 0.382 level resting around $0.14225, marking a significant technical area that has recently attracted renewed interest. Current price action appears to stabilize around a zone where the multi-year descending trend line (yellow) retest converges with the 0.382 Fib level, circled on the chart as a potential turning point.
Meanwhile, the Global Liquidity Index, depicted at the top of the image, has transitioned within its own downward price channel, indicating a broader contraction in available market liquidity over the past year. Notably, each touchpoint at the lower boundary of the channel has been synchronized with a significant turning point in Dogecoin’s price movement.
The circular markers emphasize moments where the liquidity curve dipped, and Dogecoin subsequently established either local or macro bottoms. Kevin argues that this correlation should alert traders, as it may foreshadow a rebound if liquidity inflows begin to stabilize or rise again.
But why is the Global Liquidity Index significant for Dogecoin? Generally, higher liquidity levels can indicate an influx of capital into risk-on assets, particularly memecoins like DOGE. Conversely, a declining Global Liquidity Index reflects tightening financial conditions around the globe.
Historically, Dogecoin’s most dramatic movements—such as the 2021 rally—were observed when broader liquidity was on the rise, creating a conducive trading environment that boosted volumes across the cryptocurrency landscape.
Though Kevin’s chart does not provide guarantees, it highlights an important nexus where Dogecoin’s historic support lines, fib retracement levels, and a bottoming global liquidity channel intersect. Whether this convergence will ignite the next Dogecoin rally remains uncertain, but the chart compellingly suggests that observers should closely monitor the evolution of the Global Liquidity Index and its implications for this beloved meme-inspired cryptocurrency.
At press time, DOGE traded at $0.15723.
