Currently, Dogecoin [DOGE] is experiencing a surge in its bi-monthly Relative Strength Index (RSI), reaching levels not witnessed since 2020. This surge mirrors a previous pattern that kickstarted a significant rally in the past. As of now, DOGE is trading at $0.2112, reflecting a 7.17% increase over the last 24 hours. Consequently, this meme-inspired cryptocurrency seems poised for a potential breakout based on its current trajectory.
It is crucial to note that as key resistance levels draw nearer, the upcoming three candlesticks will play a pivotal role in determining whether this momentum can propel Dogecoin towards a bullish phase.
Is the Technical Configuration Conducive to a Breakout?
The bi-monthly RSI for Dogecoin has hit 68.15, indicating a surge in buying pressure. A similar RSI level in 2020 marked the commencement of a major price rally. Predictably, this speculation has aroused discussions regarding the possibility of Dogecoin gearing up for another significant movement, as per information from an X post (formerly Twitter).
Nevertheless, while a high RSI signifies strength, it also hints at a potential overbought scenario. Consequently, the aforementioned observation raises queries about the sustainability of this momentum or the likelihood of a short-term consolidation.
Recent candlestick formations have indicated consistent gains, with Dogecoin establishing higher highs – a positive indicator of increasing bullish sentiment. However, the current price is currently confronting a critical resistance barrier at $0.229. Breaching this level is essential for Dogecoin to validate a bullish breakout, failing which could trigger a temporary retracement, potentially delaying the cryptocurrency’s next surge.
DOGE On-Chain Indicators – Are Fundamentals Aligning with Price Action?
On-chain metrics have also unveiled some optimistic signals. Network growth demonstrated a 0.26% increase, suggesting heightened engagement and interest in the Dogecoin ecosystem. This uptick typically corresponds with sustained positive sentiment, indicating that more participants are entering the Dogecoin realm as its valuation ascends.
Furthermore, 0.74% of addresses were deemed “In the Money” presently, signifying profitability for holders and reinforcing stable holding patterns. Additionally, substantial transactions surged by 8.13%, implying increased involvement from prominent market participants, a development that aligns well with Dogecoin’s recent price upsurge.
The number of daily active addresses related to Dogecoin has witnessed a notable rise, surpassing 32,000, as per data from Santiment analytics. This surge in user interaction coincided with the broader bullish sentiment, underscoring an increase in active transactions.
DOGE Market Sentiment – Are Traders Anticipating a Breakout?
Finally, the long/short ratio revealed that 51.85% of traders held long positions, slightly outnumbering the 48.15% involved in short positions.
This cautious optimism implies that while traders have been gearing up for a potential breakout, they remain vigilant towards probable resistance levels. A firm breakthrough above $0.229 could sway sentiment more convincingly towards a bullish stance, attracting additional buyers.
With a mounting RSI, positive on-chain indicators, and a balanced market sentiment, Dogecoin is exhibiting encouraging signs of a breakout. Should it surpass the $0.229 resistance threshold, it might trigger the next phase of a robust rally. However, a failure to breach this level could result in a temporary halt.