Dogecoin (DOGE) Breaks Key Resistance: Technical Signals Point to Potential 45% Rally Amid Broader Meme Coin Surge

Dogecoin (DOGE) is making waves in the cryptocurrency market today, holding strong above $0.18 and posting impressive gains of approximately

Dogecoin (DOGE) price is making good waves in the cryptocurrency market on Wednesday morning, holding above $0.18 and extending its impressive rally with roughly 13% gains over the past 24 hours. This surge in DOGE/USD comes as part of an improvement in the overall market sentiment and a broader memecoin rally that has seen competitors like Shiba Inu SHIB/USD, PEPE, and BONK skyrocket to new monthly highs.

Dogecoin Breaks Key Resistance: Falling Wedge Pattern Signals Bullish Momentum

Dogecoin has finally broken over a crucial declining trendline resistance that has been limiting its price since December following months of stabilization. Since November last year, the coin has developed a typical falling wedge pattern where the upper trendline links the highest levels since December 8 and the lower trendline links the lowest points from November.

The breakout of this technical pattern is especially noteworthy since it signals a similar configuration from October 2024, which earlier started off a 300% increase from $0.11 to $0.48. Technical analysts note that the present compression has spanned nearly six months, aligning with the timeframe following last year’s explosive move in previous consolidation periods.

The development of a double-bottom pattern around $0.1445 helps to further confirm the breakout and legitimize the bullish view. Bulls are concentrating on the next significant resistance level at $0.1809 as DOGE currently trades above its 50-day Simple Moving Average.

Warning Signs: Overbought Indicators Could Signal Short-Term Correction

Although the outlook appears bright, several signs point to a brief correction perhaps just around here. While the Stochastic Oscillator has entered overbought territory, the Relative Strength Index (RSI) has moved over the neutral 50 mark, indicating developing momentum.

Compared to past months, trading volume is still relatively low, suggesting that although optimistic momentum is building, it might still be in its early stages. The daily Stochastic Oscillators across meme coins indicate that corrections could develop in the short term, perhaps offering traders attempting to position themselves for the expected bigger move better entry points.

Fundamental Catalysts Supporting Further Upside

Several fundamental drivers could propel Dogecoin’s ongoing rally. With Grayscale and Rex-Osprey already applying, Paul Atkins’ election as the new Securities and Exchange Commission Chair has sparked rumors concerning possible approval of spot DOGE ETFs.

On-chain measurements from Santiment reveal that big holders are accumulating more as the number of addresses moving between 100 million and 1 billion DOGE tokens is increasing. Usually, this whale build-up precedes notable price swings in the coin market.

Moreover, the slowing American economy might help DOGE in some indirect way. While the U.S. economic growth is expected to drop to 1.8% this year from 2.8% last year, recent predictions from the International Monetary Fund show that worldwide growth will decline to 2.8% in 2023, down from 3.3%. This economic background might inspire the Federal Reserve to take action with interest rate reductions, in which case cryptocurrencies have traditionally performed well.

Dogecoin Price Prediction

Should Dogecoin manage to break the $0.1809 barrier, it may extend its rally by as much as 45%, thus approaching the crucial resistance level at $0.2285 in the coming weeks. For such a move to materialize, DOGE would need to clear additional hurdles at $0.2106 and the 100-day Simple Moving Average.

The anticipated measured move from the falling wedge breakout suggests a final objective around $0.39, hence indicating a 138% gain from the present levels. More optimistic forecasts indicate that DOGE might touch the $0.65 level, completing another three-fold rally if the scenario precisely mimics last year’s pattern.

What’s Next for Dogecoin Traders?

According to Coinglass data, short positions made up over 85% of the $11.68 million in liquidations as Dogecoin’s explosive surge triggered significant futures liquidations. Should the rally continue, this squeeze on short sellers could fuel it further.

As Bitcoin also shows strength nearing the $90,000 level, market participants will be keenly observing BTC’s move as it keeps impacting the whole cryptocurrency market. One analyst said, “If BTC breaks above $89K and shows conviction upwards, I think Dogecoin gets back to $0.26 relatively quickly.”