Dogecoin (DOGE) Price Action Suggests a Bullish Trend Might Be Forming

Dogecoin's recent price action suggests a bullish trend might be forming as the popular cryptocurrency tests key support levels.

Dogecoin price has tested key support levels in recent days, which might indicate that a bullish trend is forming.

After rising 18% last week, the popular meme coin appears poised for further upward movement according to multiple market indicators.

The meme-inspired cryptocurrency has reached an important ascending support line on the weekly chart. This technical level has historically served as a major catalyst for price rallies.

In past instances, this support zone prompted a market high of $0.48. Current analysis suggests a potential rally within the $0.22 to $0.48 range, depending on overall market conditions.

Top traders are closely watching the $0.22 level. If DOGE breaks above this threshold, the possibilities for additional advances become more likely.

The $0.38 price point represents another significant target due to major liquidity clusters at this level. This emphasizes the importance of maintaining upward momentum for sustained gains.

At present, DOGE is trading at around $0.16, slightly below the crucial $0.17 breakout point that several analysts are highlighting.

Chart: Benzinga Pro

As seen in the graph above, Dogecoin price has found support at an ascending support line on the weekly chart. This level has been instrumental in propelling the cryptocurrency to new highs throughout its history.

In previous instances, when the price tested this support zone, it sparked a substantial rally that carried DOGE to a new peak of $0.48.

If history repeats itself, we can anticipate a similar price increase from the current support level, potentially leading to a rally within the $0.22 to $0.48 range. However, the actual price range and the possibility of a steeper ascent will depend on broader market conditions and the reactions of traders to specific price levels.

Increased buying pressure is evident at the $0.22 level, which serves as a key resistance point for traders to watch. A breach of this barrier could open the door for DOGE to surge even higher.

At the $0.38 price point, there are major liquidity clusters, highlighting the importance of maintaining strong upward momentum to pierce through this barrier.

At the same time, trading volume across the market has soared 16.12% to $2.93 billion. Option volume has shown even stronger growth, climbing 87.59% in the past 24 hours.

Key sentiment indicators are also pointing toward a bullish outlook. The Volume-Weighted Funding Rate currently stands at 0.0071%, suggesting potential for continued market growth.

The Open Interest-Weighted Funding Rate shows an identical reading of 0.0071%. This metric indicates that unsettled contracts are predominantly held by long traders, further hinting at possible upward price movement.

These metrics combine to show that current long trades have substantial buying volume behind them. This could be a key factor in driving prices higher in the coming days.

In the realm of spot market activity, recent data showcases traders purchasing a substantial $8.9 million worth of DOGE, continuing a multi-day buying trend.

This marks a persistent pattern of traders accumulating large volumes of Dogecoin, which could be a significant factor in pushing prices upward.

Furthermore, the Long-Short Liquidation Ratio reveals more seller losses than buyer losses. Sellers have recorded losses totaling $630,000 while long traders have experienced comparatively lower losses.

This imbalance indicates increased buyer activity, with buyers willing to pay premium prices for their purchases. Such behavior is often a precursor to price surges in cryptocurrency markets.

Several analysts have provided their perspectives on DOGE’s potential movement. One analyst identified $0.17 as a crucial resistance level on X.

If Dogecoin secures a weekly close above this $0.17 threshold, it could trigger a run toward $0.21 and possibly reach $0.29. However, maintaining the $0.13 support level remains essential for continued momentum.

Another expert noted that DOGE is displaying technical formations similar to those seen before its massive 2021 rally, when it reached an all-time high of $0.7376.

According to this analysis, if history repeats itself, Dogecoin’s price could surge by 200% to 330% from current levels. This would support a long-term price prediction well above its previous peak.

Dogecoin’s circulating supply has increased by more than 40% since 2021, now standing at 148.83 billion DOGE. This supply expansion changes the dynamics of any price targets.

When DOGE reached its all-time high of $0.7376 in 2021, its market capitalization was approximately $80 billion with a circulating supply of just over 108 billion coins.

With today’s larger supply, DOGE would need