A Breakout on the Horizon for Dogecoin Price, but Will it Escape the Range?
Dogecoin, the largest meme coin, has been stuck within a narrow range since the beginning of the year, but a breakout could be brewing. With support at $0.075 and resistance at $0.088, DOGE is currently trading at $0.0811.
Since January, the activity in the Dogecoin ecosystem has slowed down, but 60% of all Dogecoin addresses, which is roughly 1.34 million, are in profit, according to blockchain analytics company IntoTheBlock. This suggests a bullish outcome and highlights the importance of key support ranges, such as the region between $0.0772 and $0.0792, where 624k addresses bought 4.38 billion DOGE at an average price of $0.0787.
If Dogecoin can break above the heavily congested support at $0.0787, it could find a clear path towards $0.094. However, losing this level of support may lead to a drop to $0.07, allowing DOGE to gather fresh liquidity as investors take advantage of the dips.
A closer look at the network reveals a significant drop in both transaction volume and whale transaction count, indicating lower trading activity. This trend could be attributed to reduced interest in trading or buying the meme coin and a loss of confidence in Dogecoin’s ability to recover.
On the daily chart, Dogecoin is trapped between support provided by the 50-day Exponential Moving Average (EMA) and resistance highlighted by the falling trendline in conjunction with the 50-day EMA. The Relative Strength Index (RSI) is currently in the neutral region at 53, showing no significant progress in driving the price higher.
Traders will be closely watching the trendline resistance marked by the 50-day EMA this week. If this area can be flipped into support, it could bring attention back to DOGE. If confidence in the uptrend builds up, a rally beyond the range high resistance at $0.088 could be within reach, with a target of $0.1.
However, based on the current technical structure and macro environment, it is premature to assume that a breakout above $0.1 is guaranteed in the short term. Investors should be prepared for the possibility of DOGE ranging in the sideways channel for an extended period before climbing to higher levels.
Analyst comment
Neutral news.
As an analyst, it is possible that Dogecoin could break out of its narrow trading range, with support at $0.075 and resistance at $0.088. If Dogecoin can break above the support at $0.0787, it could reach $0.094. However, losing this support level may result in a drop to $0.07. The drop in transaction volume and whale transaction count suggests reduced interest in trading or buying Dogecoin. Traders should closely watch the trendline resistance and the 50-day EMA for potential bullish movements. A breakout above $0.1 in the short term is not guaranteed, so investors should be prepared for a possible extended sideways movement before higher levels are reached.
