Dogecoin (DOGE) Poised for Takeoff: Break Above $0.20 Could Spark Explosive Rally

Key Takeaways

• Dogecoin (DOGE) rebounded from a key long-term support trendline.
• Dogecoin has formed a short-term bullish double-bottom pattern.
• Is DOGE able to maintain its upward trend and surpass the resistance level?

In April, Dogecoin’s price rebounded, stopping a potential break below a long-term diagonal support line.

However, while Dogecoin’s
graph compared with the Bitcoin (BTC) price
appears optimistic, whereas the outlook for the pair versus USD remains uncertain.

The price of DOGE needs to surpass the $0.20 resistance level to validate its potential shift towards an upward trajectory.

Let’s analyze the price action and see if this breakout will happen.

Dogecoin Price Bounces

The extended outlook for Dogecoin indicates that the value has risen in tandem with an upward-supporting trend line beginning from early 2024.

DOGE has bounced
At the trendline multiple times, with the latest instance occurring in April (represented by a green icon), forming a bullish candlestick.

Although the rise has been significant, the Dogecoin price still hasn’t surpassed its resistance trend line, one that was established at the beginning of the year.

For the DOGE price to signal an end of its corrective phase, it needs to surpass this resistance level.

Despite the bounce,
technical indicators
are not yet bullish.

Although the Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are showing an upward trend, they remain in bearish territory.

The Relative Strength Index (RSI) is beneath 50 and the Moving Average Convergence Divergence (MACD) is negative, signaling a downward market direction.

Consequently, the weekly timeframe fails to validate whether the DOGE trend is bullish or bearish.

What’s Next for DOGE?

The wave analysis indicates that DOGE has finished forming
five-wave downward movement
(red) Since the peak in December.

Should the count prove correct, Dogecoin’s price has initiated an A-B-C corrective pattern destined to propel it towards the subsequent resistance level at $0.27.

Nevertheless, prior to reaching it,
DOGE must clear
The $0.20 horizontal resistance level, which might serve as the peak for wave A.

Despite this, the technical indicators are strongly positive. Both the RSI and MACD formed bullish divergences (highlighted in orange).

The differences strengthened a bull-like double-bottom formation for Dogecoin.

So, Dogecoin’s price will likely break out above $0.20 and reach the $0.27 resistance.

The near-term forecast aligns with this as Dogecoin’s price operates within an
ascending parallel channel
, frequently including repair mechanisms.

The Dogecoin channel includes wave A within this pattern, and breaking below it would indicate that wave B has commenced.

Depending on the price movement, it remains uncertain whether DOGE’s price will establish an additional short-term peak or not.

In any event, a potential failure beneath the support level is probable.

Correction Before Rally

The price of DOGE has exhibited remarkable resilience
By rebounding in April, avoiding a collapse due to prolonged support.

Nevertheless, the memecoin hasn’t yet validated its bullish trend reversal as it still hasn’t broken through its primary resistance level.

The current wave analysis indicates that a breakout might happen; however, there could be an early dip first.