The popular memecoin, Dogecoin (DOGE), has been relatively quiet during the recent altcoin market rally. However, don’t let that fool you, as it appears that Dogecoin might just be gearing up for a powerful breakout on the technical set up.
The DOGE price is below key support levels, suggesting that overhead pressure could be suppressing the price. Fortunately for bulls, the price has formed a bullish chart pattern that can result in a significant upward move if confirmed.
Dogecoin Holders Could Exploit A Rounded Bottom To $0.09
A look at Dogecoin’s price action on the daily timeframe reveals the formation of a robust rounded bottom chart pattern. This means that the DOGE price has been set up to make a 26% uptick from the current price.
At the time of writing, the dog-themed altcoin was exchanging hands at $0.0712 and was fighting immediate resistance from the 100-day simple moving average (SMA) at $0.0714. A daily candlestick close above this level would see DOGE rise to confront resistance from the pattern’s neckline at $0.075.
Breaking this level would confirm a bullish breakout from the rounded bottom pattern with the first hurdle emerging from the 200-day SMA at $0.0766. Additional barriers can be found at the $0.080 and $0.085 psychological levels that the DOGE Army has to overcome before the price reaches the technical target of the prevailing chart pattern at $0.09. This would bring the total gains to 26%.
DOGE/USD Daily Chart
Apart from the chart, other technical indicators supported Dogecoin’s positive outlook. The 50-day and 200-day SMAs were tipping upward. This was an indication that the market still favored the upside. The 50-day SMA provided ample support on the downside that was likely to absorb any ensuing selling pressure.
Also supporting DOGE’s bullish thesis was the position of the relative strength index (RSI) in the positive region. The price strength at 56, just above the midline, indicated that there were still more buyers than sellers in the market.
Further validation of the upward trajectory was the movement of the MACD in the positive region with the 12-day EMA still moving above the 26-day EMA. This also indicated that the market conditions still favored the upside.
On the other hand, the RSI was pointing downward. This meant that the sellers had begun re-entering the market. These bears could pull Dogecoin price below the $0.070 psychological level toward the 50-day SMA at $0.0664.
Breaching with level would trigger massive sell orders with DOGE dropping toward the chart’s bottom at $0.060. Traders could expect buyers to take a breather here giving them an opportunity to regroup and buy more on the dip before staging another comeback.