Dogecoin (DOGE) Has Entered the Oversold Zone, Setting the Stage for a Potential Breakout

DOGE has been on a roller coaster ride in recent weeks. The popular meme cryptocurrency has shown mixed performance with a slight uptick of 1% in the last 24 hours

Dogecoin (DOGE) has been showing some mixed signals in recent weeks, with a slight uptick of 1% in the last 24 hours but a steeper 17.2% decline over the past week.

This follows a more substantial decrease of 33.8% over the past month and a 1.3% gain over the past year.

Despite this volatility, Dogecoin has managed to maintain support at a critical technical level, setting the stage for a potential breakout that could push the cryptocurrency toward $2.80, according to a well-known analyst.

Dogecoin entered strong bullish phases after breaking above the 100-week Simple Moving Average (SMA), according to Trader Tardigrade.

The 100-week SMA has emerged as a crucial level for traders and analysts focused on long-term trends in the cryptocurrency market.

The analyst highlighted that DOGE remained below this long-term resistance level during the 2017-2018 bull run before breaking out to trigger a rally.

Similarly, during the 2020-2021 bull market, Dogecoin surged after crossing above the 100-week SMA and used this level as support during retracements.

Currently, Dogecoin is testing this key level again. If history repeats itself, a successful breakout could push Dogecoin toward $2.80.

Furthermore, Trader Tardigrade noted that Dogecoin has entered the oversold zone on the Relative Strength Index (RSI).

This condition has typically marked price bottoms before past uptrends in the cryptocurrency.

The technical setup follows a pattern where Dogecoin forms a low before creating a lower low while the RSI remains oversold. Historically, this pattern has preceded bullish reversals in the Dogecoin price.

Another analyst, CryptoElites, observed a symmetrical triangle breakout pattern in Dogecoin's price action, which could lead to a surge toward $5 if the macroeconomic climate remains supportive and market momentum continues.

On-chain data from Glassnode reveals that new Dogecoin wallet addresses have more than doubled in just one month.

This surge in network activity suggests increasing interest in the meme cryptocurrency, which could bode well for future price performance.

Historically, periods of rising adoption have preceded bullish price action for Dogecoin.

Meanwhile, analyst Ali Martinez suggests that Dogecoin could surge by 11,811% to reach $20 if it manages to maintain support at the crucial $0.16 level.

Martinez noted that Dogecoin has been trending within an ascending channel since 2015. The current price is close to the lower boundary of this channel, which has served as support during past downturns.

If this support holds, he believes DOGE could bounce to the mid or upper boundary of the ascending channel. These targets correspond to the 1.272 and 1.618 Fibonacci extension levels at $2.77 and $20, respectively.

The $20 prediction aligns with an earlier call from analyst Javon Marks, who insisted this target is realistic for the meme coin given the right market conditions.

As of Monday morning, Dogecoin is trading at around $0.17, showing a 2% increase since the start of the day. The cryptocurrency continues to hold above the critical $0.16 support level identified by analysts.

The integration of new wallet addresses over the past month supports the case for growing adoption. This metric moved from 16,400 to 34,600 new wallets amid renewed interest in the Dogecoin ecosystem.