Once again, the price movements of the popular memecoin, Dogecoin [DOGE], have been influenced by bearish sentiment, leading to a dip in its value. Despite this setback, there are indications that Dogecoin was on the cusp of breaking out of a bullish trend.
If a breakout occurs successfully, there is a possibility that investors could witness DOGE making strides towards the $1 mark.
Is Dogecoin Primed for a Breakout?
According to data from CoinMarketCap, the value of the leading memecoin has declined by more than 4% over the past week. The situation exacerbated further in the last 24 hours, with Dogecoin experiencing another 4% decrease in its price.
At the time of writing, Dogecoin was being traded at $0.09534, boasting a market capitalization exceeding $13.9 billion, solidifying its position as the 8th largest cryptocurrency.
Upon analyzing data from IntoTheBlock, it was observed that there were 3.52 million DOGE addresses in a profitable position, constituting more than 54% of the total number of DOGE addresses.
Meanwhile, insights from World Of Charts, a prominent crypto analyst, pointed out a bullish pattern on Dogecoin’s chart. The bullish falling wedge formation surfaced on the chart a few months back, and since its formation, Dogecoin’s price has been consolidating within this pattern.
The current indicators suggest that Dogecoin is exhibiting signs of a potential bullish breakout. If this pattern holds true, a breakout could propel DOGE towards the $1 milestone in the upcoming weeks.
Evaluating the Likelihood of Dogecoin’s Breakout
Examining Dogecoin’s on-chain data, CryptoCrypto delved into Santiment’s data to gain insights into the possibility of a bullish breakout for the leading memecoin. The analysis revealed a recent drop in Dogecoin’s MVRV ratio, suggesting a continued decline in its price.
However, amid this, other metrics displayed optimism. The count of whale transactions remained elevated, and the daily active addresses exhibited stability, indicating a consistent influx of activity on the blockchain.
Furthermore, at the time of this analysis, Dogecoin’s fear and greed index stood at 39%, signaling a prevailing “fear” sentiment in the market.
Historically, such levels in the fear and greed index have often foreshadowed potential price upticks. A closer examination of Dogecoin’s daily chart was then conducted to assess the technical indicators concerning a bullish breakout from the falling wedge pattern.
Our assessment highlighted a downward trend in the Relative Strength Index (RSI) and a bearish crossover in the MACD, indicating a possible delay in Dogecoin breaking out of the bullish pattern.
Despite these signals, the Chaikin Money Flow (CMF) remained optimistic, signaling an upward trajectory. The convergence of these indicators presents a nuanced perspective on Dogecoin’s potential breakout in the near future.