Against all odds, Dogecoin (DOGE) showcased an impressive performance in the previous week, hinting at a potentially significant bull rally in the near future. Among the indicators pointing towards a bullish trend, a recent analysis unveiled the presence of a pattern that could propel DOGE’s price to new heights.
Potential for Breakout in Dogecoin
During the past week, Dogecoin witnessed a strong bullish presence in the market, with an increase in price exceeding 20% over the last seven days. A notable surge of 4% was observed in the price within a 24-hour period, bringing DOGE to a value of $0.1622 at the time of reporting.
Analytics from IntoTheBlock disclosed that following this surge, around 5.34 million DOGE addresses had accrued profits, representing 84% of the total Dogecoin addresses.
Notably, a well-known crypto analyst named Ali recently pointed out a bullish pattern on Dogecoin’s chart. This pattern emerged after DOGE experienced a sharp price surge, followed by a minor correction, resulting in the formation of a bullish flag pattern. Currently, DOGE is inching close to breaking out above the upper boundary of this pattern, a move that could potentially drive its price to $0.209 in the upcoming weeks.
Elon Musk’s involvement in the latest increase in DOGE’s value is also noteworthy, a recurring factor that has significantly impacted the coin’s price on multiple occasions before.
It was previously reported how Musk’s social media activity, particularly featuring Dogecoin content, has sparked positive investor sentiment and driven up the price of the memecoin.
Stability of the Upward Trend
Considering the recent bullish momentum of DOGE, an examination of the coin’s on-chain data was conducted to assess the sustainability of its rally. As per Santiment, DOGE’s MVRV ratio had decreased after a notable spike on October 29.
Additionally, Dogecoin’s velocity had decreased, indicating a reduction in the frequency of the coin’s usage in transactions within a specified period. Both metrics imply the possibility of a correction while DOGE consolidates within the bullish flag pattern.
Further analysis of the coin’s daily chart was conducted to gain insights into potential price movements, particularly in terms of a corrective phase or a continuation of the upward trend.
It was observed that Dogecoin’s Money Flow Index (MFI) had experienced a significant decline, suggesting an impending price drop. In the event of a correction, DOGE may retreat towards its support level near the 20-day SMA, presenting an opportunity for bulls to regain control.