Once again, the trajectory of Dogecoin [DOGE] has been influenced by bearish sentiment within the memecoin market, resulting in a decline in its value. However, beneath the surface, there are indications that this memecoin was gearing up for a potential breakout from a bullish trend.
If this breakout materializes, there is a possibility that DOGE could surge towards the $1 mark.
Is a Breakout on the Horizon for Dogecoin?
Recent data from CoinMarketCap indicates that the leading memecoin globally has experienced a decrease of more than 4% over the last week. The situation exacerbated in the past 24 hours with a further 4% decline in price.
At the current moment, Dogecoin is being traded at $0.09534, boasting a market capitalization exceeding $13.9 billion, solidifying its position as the 8th largest cryptocurrency.
According to insights from IntoTheBlock, 3.52 million DOGE addresses are currently in a profitable zone, accounting for more than 54% of the total DOGE addresses in circulation.
Meanwhile, a well-known crypto analyst, World Of Charts, highlighted a bullish pattern discernible in DOGE’s chart. This bullish falling wedge pattern took shape several months ago, serving as a consolidation zone for the coin’s price movements.
Presently, there are indications that a bullish breakout is imminent. Should this pattern hold true, it is plausible that DOGE could make significant strides towards the $1 threshold in the ensuing weeks.
Evaluating the Likelihood of DOGE’s Breakout
An analysis carried out by CryptoCrypto delved into the on-chain data of the largest memecoin worldwide to determine if a bullish breakout is in the cards. Based on data from Santiment, Dogecoin’s MVRV ratio witnessed a decline last week, indicating a continued downtrend in price.
Despite this, other metrics paint a more positive picture. Notably, the count of whale transactions remains elevated, while daily active addresses show stability, signifying sustained activity on DOGE’s blockchain.
Furthermore, at the current juncture, DOGE’s fear and greed index stands at 39%, reflecting a prevailing sense of “fear” in the market.
Historically, when this metric hits such levels, it often signifies an increased likelihood of price appreciation. A closer examination of DOGE’s daily chart was conducted to gain insights into the technical indicators signaling a potential breakout from the falling wedge pattern.
Our analysis reveals that the Relative Strength Index (RSI) is experiencing a downward trend, alongside a bearish crossover depicted by the MACD, indicating potential delays in DOGE’s breakout above the bullish pattern.
Nevertheless, the Chaikin Money Flow (CMF) remains bullish, with an uptick registered, hinting at positive momentum in the market.