Dogecoin Price Forecast: DOGE spot ETF hype sparks breakout hopes as supply in profit rises 

• Dogecoin price is consolidating, hovering around the 50-day EMA, as optimism for spot ETF approvals surges.
• Dogecoin on-chain metrics signal bullish potential as derivatives open interest rises 2.17% to $1.85 billion amid rising shorts liquidation.
• The 50-day EMA support at $0.179 could stop a potential reversal toward DOGE's April low at $0.13.

Dogecoin's (DOGE) price is trading broadly sideways at around $0.18 on Friday, as the broader crypto market recovers amid a boost in risk sentiment.. The largest meme coin by market capitalization could extend the previous month's bounce back from the April 7 low at $0.13, riding on the hype around the possibility that the Securities and Exchange Commission (SEC) approves DOGE spot Exchange Traded Funds (ETFs). 

Dogecoin spot ETF hype surges 

With crypto-friendly Paul Atkins taking over as the agency's chair, the change of leadership at the SEC has sparked hopes around Dogecoin. Leading fund managers, including 21Shares and Bitwise, have submitted applications to the SEC seeking approval to launch spot DOGE ETFs. This, and Nasdaq filing the 19b-4 form with the agency proposing to list and trade shares of the 21Shares Dogecoin ETF, marks a major milestone toward bringing crypto's top meme coin to mainstream financial markets.

Spot ETFs are financial products that allow investors to seek exposure to crypto assets without purchasing the actual coin on cryptocurrency exchanges or over-the-counter (OTC) platforms. Spot ETFs are regulated and can be purchased directly on stock exchanges.

Three DOGE ETF proposals from Grayscale, Bitwise, and 21Shares are under SEC review. Bloomberg's Eric Balchunas assigned them an 80% approval chance. 

Santiment researchers said in their latest biweekly market update that "the partnership between 21Shares and the Dogecoin Foundation (via the House of Doge) to promote the ETF has added credibility to the project, sparking stronger engagement from both longtime DOGE supporters and traditional investors looking for new opportunities."

Crowd sentiment has also shifted, with Dogecoin viewed less as a meme or a joke coin but as an alternative option for a wider scope of investors, including institutions.

The social chatter around Dogecoin has improved significantly, per the chart below, shared by Santiment. Even though the SEC has extended DOGE ETFs review to June, the mood around the token signals growing optimism among traders.

Social dominance relative to other assets (purple) | Source: Santiment

Can Dogecoin resume bullish momentum as open interest rises?

A 2.17% increase in the derivatives' open interest (OI) points to growing anticipation in the market, as more traders open new positions. The long-to-short ratio is slightly above one, revealing that traders are leaning towards long rather than short positions.

In the last 24 hours, liquidations of short positions reached $2.75 million compared to approximately $722,000 of forcibly closed longs. The high amount of short liquidations suggests a short squeeze, where short sellers are forced to close positions at a loss. This trend could fuel upward price momentum.

Dogecoin derivatives' OI | Source: Coinglass

Meanwhile, the daily chart below shows Dogecoin's price hovering at $0.180, and slightly above the 50-day Exponential Moving Average (EMA) at $0.179. A daily close above this level could further encourage DOGE buyers, betting on the price rising to test the 100-day EMA resistance at $0.204 and the 200-day EMA at $0.218.

DOGE/USDT daily chart

The Relative Strength Index (RSI) indicator's position above the midline at 57.63 supports the bullish outlook. Continued upward movement of the RSI toward the overbought region could bolster the uptrend's strength.

However, losing the 50-day EMA support at $0.179 could cause instability, resulting in a pullback that would likely test support at $0.14 or even extend the down leg to DOGE's April 7 low at $0.13.