Is A Dogecoin Bullish Breakout Near Top Analyst Weighs In

Dogecoin (DOGE) has recently experienced a significant surge in network activity, with over 84,306 new active addresses—the highest number in the past six months. This increase comes amid rising whale activity and growing interest in the meme cryptocurrency, despite a recent price correction.

As technical indicators suggest potential bullish momentum, some analysts anticipate that Dogecoin could be preparing for another major price rally.

Source: Ali XHistorical Breakout Patterns Suggest Major Gains Ahead

A recent comparison of Dogecoin’s performance during different market cycles suggests that the cryptocurrency may be on the verge of a significant breakout.

Historically, when Dogecoin breaks above a key resistance level, often referred to as the “white line,” and closes the week above it, the price tends to surge parabolically. Last Sunday, a breakout confirmation occurred, suggesting that an upward trend could begin soon.

$DOGE $10+ DOGECOIN?!This image provides a weekly side-by-side comparison of Dogecoin's breakout in each market cycle. Historically, whenever #DOGECOIN breaks above the white line and closes the week above it, a significant parabolic surge follows. This breakout confirmation… pic.twitter.com/GDuTHVtwCD

— Ðima James Potts (@DimaPotts36) September 30, 2024

Previous cycles have seen substantial price increases. In Cycle 1, Dogecoin gained over 9,363% after crossing a critical threshold where the red and green lines intersected.

Cycle 2 saw even more impressive gains, with a 29,626% surge. With Cycle 3 now underway, expectations are high for even greater returns.

Factors contributing to this optimism include growing adoption of Dogecoin for transactions, its lower price point compared to other major cryptocurrencies, and upcoming technological upgrades. Faster transaction processing and improved security could further enhance Dogecoin’s utility and appeal to a broader investor base.

Dogecoin Whale Activity and Resistance Levels

Alongside the rising number of active addresses, whale activity on the Dogecoin network remains high. In the last 24 hours, whales have accumulated 417 million DOGE, equivalent to around $45 million, marking the largest whale inflows in nearly a month.

This signals strong interest from large holders, suggesting that whales may be positioning themselves for a potential price reversal.

Source: TradingView

However, Dogecoin has faced resistance around the $0.11 mark, which it has tested multiple times in recent days. For the price to confirm a bullish trend, analysts believe it must flip this level into support. If successful, the next target would be $0.118, followed by $0.130, where the price peaked in mid-September.

Technical Indicators Point to Potential Upside

According to the technical analysis, Dogecoin might be headed towards a bullish reversal soon. The Moving Average Convergence Divergence (MACD) indicator is approaching a crossover, a signal that has in the past marked the beginning of major price gains.

In past cases such crossovers resulted in the price rise of 90% and 180% respectively. If this pattern continues, some experts believe that the price of this cryptocurrency may surge to $0.20 or even more in the short-term future.

The last two times #Dogecoin $DOGE had a MACD bullish crossover on the weekly chart, it rallied 90% and 180%, respectively. A new MACD bullish crossover could be forming soon! pic.twitter.com/1YfefMe36i

— Ali (@ali_charts) October 2, 2024

Presently, the Relative Strength Index (RSI) stands at 34.20, which indicates that Dogecoin is close to the over-sold range. If the RSI goes below 30, it will create a price bounce off opportunity.

However, the short-term 50-Day MA is acting as support at the moment, whereas the longer-term 200-Day SMA could pose some resistance in the coming days.

Dogecoin: Growing Adoption and Technological Upgrades

Furthermore, the adoption of Dogecoin is constantly on the rise while the technology behind the cryptocurrency is still being developed. Some of the projects, like LibDogecoin and GigaWallet, are aimed at improving the network’s transactional throughput and increasing the payment usage of the network.

These developments could result in increased usage and demand for DOGE especially as more firms embrace it as a mode of payment.

As the number of active addresses and whales increases, it means investors are preparing for an upswing in the market. If Dogecoin can break through certain resistance levels and continue moving upwards, a major price surge may be imminent.

However, investors should be prepared for the possibility of short term declines as history has pointed out that major swings to the downside are typically followed by even bigger gains.

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