Dogecoin Drops 4.90% But Bullish Breakout Possible
2min read Dogecoin is currently under pressure at the $0.13 support level, with market participants closely monitoring for signs of a breakout that could indicate a new upward trend. Despite a recent downturn, the cryptocurrency's bullish pennant formation suggests potential for significant price movement if key resistance levels are breached. According to a COINOTAG analyst, if Dogecoin breaks decisively above the pennant, it could target resistance levels at $0.20 and potentially $0.30.
At the time of writing, Dogecoin was trading at $0.1446, marking a 4.90% decline in the past 24 hours. However, the overall structure indicates a potential bullish breakout, with Dogecoin positioned at the edge of a falling pennant formation. This technical setup has historically signaled trend reversals, particularly when backed by strong support and improving market sentiment, as indicated by the significant $0.13 level.
If Dogecoin manages to break decisively above this pennant formation, traders could see targets around $0.20 and possibly $0.30 in the upcoming weeks, making the current levels critical for future price action. However, Dogecoin’s on-chain activity has not kept up with the bullish technical structure. As of now, daily active addresses are at a modest 42,816, while the total transaction count is struggling at just 20,793. These figures highlight a concerning lack of engagement among users, posing risks for sustained upward movement.
Although price action appears promising, substantial participation from the user base is essential to validate any potential bullish breakout. Without strong fundamentals and active user engagement, the favorable price movements may not sustain, and Dogecoin could face exhaustion before reaching higher targets. Dogecoin’s MVRV (Market Value to Realized Value) ratio currently stands at 1.47%, indicating that most holders are nearing their breakeven point. This data suggests minimal selling pressure from those looking to take profits, which could be a constructive sign for the market.
Ask Aime: What is the potential for a bullish breakout in Dogecoin and what are the risks involved?
Historically, MVRV levels at or near this range have often foreshadowed upward price movements. However, the absence of significant accumulation by larger holders might continue to limit upward momentum unless new interest emerges in the market. Traders should be vigilant regarding this metric. An increase in the MVRV ratio could indicate a shift in price dynamics that might precede favorable trading conditions.
The Stock-to-Flow ratio for Dogecoin has surged to 69.09, a significant increase from the previously stable range of 29. This sharp rise indicates a shift in perceived scarcity, which may attract the attention of long-term investors looking for undervalued assets. An increasing S2F ratio frequently corresponds with price appreciation, especially if supported by positive market sentiment. Therefore, this recent spike could be an early signal of renewed accumulation within the Dogecoin market.
Moreover, it suggests that the dynamics of Dogecoin’s supply are becoming more favorable for potential price gains in the near future. As Dogecoin hovers around a vital support zone, it is strengthened by key technical signals such as an upward trendline and the important 61.8% Fibonacci retracement level. While the on-chain metrics indicate some weaknesses, the prevailing price structure offers a realistic potential for a trend reversal. The increase in the Stock-to-Flow ratio further bolsters a bullish stance, suggesting a resurgence of investor interest in Dogecoin. However, to experience a substantial rebound, Dogecoin will require improved user engagement and increased transactional activity to validate its current support level. If it can sustain the support at $0.13 and confirm a breakout, the likelihood of upward movement increases dramatically.
