Is Dogecoin Price Ready for a Breakout?
In a recent analysis, crypto analyst Rekt Capital has identified signs that Dogecoin (DOGE) may be on the verge of a breakout, potentially leading to a significant price rally. However, there are several factors that need to align for this scenario to unfold.
Dogecoin’s Descending Channel Pattern
Rekt Capital has shared a 1-week DOGE/USD chart, indicating that Dogecoin’s price movement has been confined within a descending channel pattern since its peak at the end of last year. This pattern is characterized by two parallel trendlines representing potential support and resistance levels, with the price oscillating between them.
Last week, DOGE’s price was rejected once again at the upper trendline, marking the fifth rejection in the past year. However, Rekt Capital highlights the “buy-the-dip” behavior exhibited by traders, which has prevented a strong downside continuation so far. The most important signal for a potential breakout is a weekly close above the channel’s top.
Potential Price Targets
Examining the daily chart of DOGE/USD, key price targets can be deduced based on Fibonacci retracement levels and Exponential Moving Averages (EMAs). The EMAs indicate potential support and resistance levels based on past price data. Currently, DOGE has dropped below the crucial 200-day EMA but found support at the 20-day EMA.
If a successful breakout occurs from the descending trend channel, the first major price target would likely be the 0.236 Fibonacci level. If DOGE bounces off this level during a retest of the breakout, it could pave the way for further price targets. On the higher side, critical resistance and support zones are at various Fibonacci retracement levels, with the ultimate goal being a potential 135% rally to reach the November 1 high.
Hot Take: Dogecoin’s Potential Breakout
While there are indications of a potential breakout for Dogecoin, it is crucial for the price to secure a weekly close above the channel top. If this occurs, coupled with supportive market dynamics, Dogecoin could experience an impressive rally once again.
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