- Dogecoin is nearing a potential breakout from a falling wedge pattern, with technical indicators and on-chain data suggesting a bullish rally if it breaks above $0.106.
- However, a daily close below $0.088 could invalidate this positive outlook and lead to a price decline.
Dogecoin (DOGE) is making headlines as it nears a critical juncture in its price movement. Currently trading within a falling wedge pattern, DOGE is approaching the upper trendline of this formation, which could signal a potential breakout and rally. As of Friday, the meme coin is trading around $0.106, with key technical indicators and on-chain data supporting a bullish outlook.
Bullish Technical Indicators
The falling wedge pattern is a common technical formation where the price consolidates within converging trendlines. For DOGE, this pattern has been forming since early March. If the price breaks above the upper trendline and closes above the 50-day Exponential Moving Average (EMA) at approximately $0.106, it would signal the start of a new uptrend. In such a scenario, Dogecoin could see a potential rally of around 33%, aiming to retest the daily resistance at $0.141.
Adding to the bullish sentiment, the Moving Average Convergence Divergence (MACD) indicator shows a bullish crossover on the daily chart. The MACD line (blue) is trading above the signal line (yellow), and rising green histogram bars above the neutral line suggest strong bullish momentum. These technical signals reinforce the expectation of a potential price surge.
On-Chain Data Supports Bullish Outlook
On-chain metrics provide further evidence for a bullish Dogecoin forecast. The DOGE long-to-short ratio, as reported by Coinglass, stands at 1.16, the highest level in almost a month. This ratio, which measures the proportion of long positions to short positions, indicates that more traders are betting on an upward price movement for DOGE.
Additionally, Santiment’s Age Consumed index shows spikes in activity, suggesting that dormant DOGE tokens are being reactivated. Historically, such spikes have been followed by price rallies, adding credibility to the bullish technical and on-chain indicators.
Despite the optimistic outlook, there is a critical support level to monitor. If Dogecoin’s daily candlestick closes below $0.088, it would invalidate the bullish thesis. Such a move would likely see DOGE’s price drop by approximately 11%, potentially retesting its weekly support at $0.078.
Dogecoin’s price action is at a pivotal point, with the potential for a significant rally if it successfully breaks out of the falling wedge pattern. Technical indicators and on-chain data align to support this bullish view, but caution is advised. A drop below $0.088 could negate the positive outlook and trigger a decline. Keep a close eye on these critical levels as Dogecoin navigates this crucial phase.
