Current market trends indicate that DOGE is on the brink of a significant breakout as cryptocurrencies continue to demonstrate bullish momentum over the past week. This positive price movement has allowed DOGE to surpass a descending trendline that has characterized the peaks of rallies since April.
Crypto analyst Ali Martinez believes this marks the initial step for Dogecoin towards a sustained uptrend. The remaining hurdle for the meme coin is to break above the $0.11 price threshold, with technical indicators like the RSI currently signaling a bullish perspective.
Dogecoin Positioned for Bullish Breakout
Dogecoin is at a pivotal moment as the cryptocurrency market reacts to the recent interest rate cut by the Fed. This event, along with expectations of additional rate cuts in the near future, has influenced financial markets positively, with cryptocurrencies, in particular, gaining from the situation. Analyst Ali Martinez has been monitoring the price movements of DOGE closely, recently identifying two specific indicators that may signal when the meme coin could make a significant move.
His analysis, based on the DOGE/TetherUS (DOGE/USDT) daily candlestick chart, reveals a largely bearish market with lower highs and lower lows since hitting $0.22 in April. This bearish trend has been reflected in similar movements in the Relative Strength Index (RSI), a momentum indicator that measures the speed and magnitude of price fluctuations. The RSI had been adhering to a downward trendline, which acted as a psychological resistance that hindered any sustainable upward movement.
Interestingly, the recent influx of capital into the cryptocurrency market has caused the RSI to trend upwards for DOGE, breaking through the resistance point. This upward shift is a crucial initial step, indicating that momentum may be favoring the bulls. Martinez highlighted that this upward movement in the RSI meets the initial technical criteria for a broader price breakout for Dogecoin. All that remains is for DOGE to break through $0.11. If DOGE manages to clear this price level, it could trigger a rally that might reshape the coin’s path for the rest of the year.
#Dogecoin is preparing for a bullish breakout! One of the two conditions has been met:
The RSI has broken the descending trendline on the daily chart.
Now we require $DOGE to surge past the $0.11 resistance! https://t.co/XN6KPh0fRr pic.twitter.com/SbKS8hY3Ri
— Ali (@ali_charts) September 21, 2024
Why is $0.11 Significant?
The significance of the $0.11 level for DOGE in the near term is highlighted by an on-chain metric from IntoTheBlock (ITB). According to ITB’s “In/Out of the Money Around Price” metric, DOGE is trading below a resistance level where 42,440 addresses collectively hold 3.86 billion DOGE tokens at a maximum price of $0.11.
This is crucial as it indicates that numerous addresses are positioned to realize profits if the meme coin can exceed $0.11. If DOGE can break above this resistance, some holders may opt to sell, which could re-establish the resistance level.
As of now, DOGE is trading at $0.1065. Bulls have the opportunity to break above $0.11 during the last week of September before the onset of Uptober. Conversely, there exists a potential for a reversal back to test support at $0.098.
Featured image created with Dall.E, chart from Tradingview.com
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