A trader has opened a 40x short against Dogecoin, betting the token's $0.07 support zone will break. But bullish leverage is climbing to a multi-month high and memecoin trading volume is picking up, a combination that could turn the short into a squeeze.
A trader recently opened a 40x short on Dogecoin, entering at $0.071 with liquidation set near $0.07, adding pressure to a support zone the token has held for nearly two months. The bet targets a yield of over 40% if the level gives way.
The bet doesn't look completely random. Dogecoin spent over four months consolidating around $0.08. A 28%-plus correction in June broke that range. It drove the token to its lowest level in more than two years.
Bulls push back against the short
Yet longs are not backing off. According to CoinGlass data, Dogecoin's 24-hour long/short ratio has climbed to a multi-month high of 1.18, showing traders still lean toward the long side. The DOGE/BTC ratio, however, looks set to close August with another lower low, showing little sign of rotation back into the memecoin.
Memecoin appetite rises as AI tokens cool
Meanwhile, capital is shifting between sectors. Trading volume across the memecoin market has risen 22% over the past 24 hours, according to CoinMarketCap data. AI token volume, by contrast, has dropped 11% over the same period, pointing to capital still flowing more heavily into memecoins.
Dogecoin's own dominance metric has slipped below 0.5%, a level last seen during the 2020-21 cycle. Those levels previously marked strong rebounds for memecoins.
If the support holds while memecoin flows keep building, the 40x short risks becoming the trigger for a short squeeze rather than a payout. A squeeze from here could send Dogecoin toward $0.075 once broader risk appetite turns.
Source: AMBCrypto
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