Why could DOGE rally 33%?

Dogecoin price trades inside a falling wedge pattern, breakout would signal a bullish move ahead.
On-chain data shows a bullish outlook as DOGE’s dormant wallets are active and the long-to-short ratio is above one.
A daily candlestick close below $0.088 would invalidate the bullish thesis.

Dogecoin (DOGE) is approaching the upper trendline of the falling wedge pattern on Friday, and a breakout would suggest a rally in the making. The bullish outlook for the dog-themed meme coin is further supported by reactivated dormant wallets and a long-to-short ratio above 1.

Dogecoin price looks promising

Dogecoin price is approaching the upper trendline of the falling wedge pattern. This pattern is formed by connecting multiple high and low levels with a trendline from early March. As of Friday, it trades at around $0.106.

Suppose DOGE breaks above the upper trendline and closes above the 50-day Exponential Moving Average (EMA) around $0.106. That breakout would signal an uptrend. Dogecoin could rally 33% from its current trading level to retest its daily resistance at $0.141.

The Moving Average Convergence Divergence (MACD) indicator, which shows a bullish crossover on the daily chart, further supports Dogecoin’s bullish outlook. The MACD line (blue line) trades above the signal line (yellow line), suggesting the bulls are buying. Additionally, it shows rising green histogram bars above its neutral line zero, indicating bullish momentum.

DOGE/USD daily chart

Looking into on-chain data further aligns with the bullish outlook. Coinglass’ DOGE long-to-short ratio stands at 1.16, the highest level in almost one month and flipping above 1 on Friday. This means more traders are betting on the asset’s price to rise.

DOGE long-to-short ratio chart

Additionally, Santiment’s Age Consumed index is in line with the bullish outlook noted from a technical perspective. The spikes in this index suggest dormant tokens (tokens stored in wallets for a long time) are in motion and can be used to spot short-term local tops or bottoms.

For DOGE, history shows that the spikes are generally followed by a rally in Dogecoin price. The most recent uptick on August 7 also forecasted that the dog-themed meme coin was ready for an uptrend.

DOGE’s Age Consumed Index chart

Despite the bullish projection shown by the technical analysis and on-chain metrics, if Dogecoin’s daily candlestick closes below $0.088, it would invalidate the bullish thesis. This scenario would crash Dogecoin’s price by 11% to retest its weekly support at $0.078.

Share: Cryptos feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.