Dogecoin Eyes Breakout as Technical Indicators Align for Rebound

Dogecoin might be eyeing a major breakout to higher levels as technical indicators indicate a possible price rebound amid the recent struggles.

Notably, Dogecoin is approaching a key technical level that may trigger a price reversal, as a prominent crypto analyst identifies bullish signals on short- and long-term charts. 

Trendline and RSI Support Could Trigger a Bounce

Analyst Trader Tardigrade shared a 4-hour price analysis showing Dogecoin nearing an upward-sloping trendline at $0.23, which has acted as support multiple times this month. Each previous touch of this trendline led to upward movement, making the current setup one to watch.

The trendline, first validated on July 10 when DOGE dipped to $0.186, marked the beginning of a sharp rally. From that point, Dogecoin surged to $0.258 by July 15, a 38.7% gain in just five days.

The second interaction occurred on July 19, when the price once again fell to the trendline, this time around $0.211. That dip triggered a new leg upward, pushing DOGE to $0.248 on July 22, a 17.5% increase within three days. These two bounces confirm the trendline’s role as a strong support zone.

Notably, Dogecoin trades at $0.2268, a 2.2% drop in the past day, reducing its monthly gain to 36%. Dogecoin’s price mirrors the broader market trends as Bitcoin is also trading at $115,257, a 2.7% decline in the past day.

The Relative Strength Index (RSI), which measures price momentum, also shows DOGE entering oversold territory. The RSI has bounced from the same level, 40, in past instances, aligning with the price trendline to suggest a potential recovery.

When the RSI reaches this level, it typically signals that the price has become oversold, suggesting a buying opportunity. 

Meanwhile, a trendline and RSI support confluence is often considered a strong technical indicator for bullish movement. Although there is no guarantee, such setups attract buying interest from short-term traders looking to catch early reversals.

Monthly Chart Forms Bullish Engulfing Pattern

Meanwhile, a more significant signal may be forming on the monthly chart. Tardigrade’s analysis highlighted that Dogecoin is close to printing a bullish engulfing candle for July. This type of candlestick forms when a large green candle fully engulfs the prior red candle, signaling that buyers have overtaken sellers.

The data also revealed that similar setups in previous cycles led to major rallies. The chart shows similar patterns in 2021 and 2023, which preceded periods of rapid price growth.

The close of the July candle will be crucial, and a close above $0.28 could confirm the strength of the bullish signal. The chart suggests that a move to $0.30 or higher is possible if the pattern holds.

Analyst Says Dogecoin Could See 610% Uptick. 

Adding to the bullish sentiment, an analysis by Bitcoinsensus reveals Dogecoin has printed a bullish MACD cross, signaling a potential major rally ahead. Historically, similar crosses have led to exponential gains, with past rallies delivering returns of +84%, +194%, and +446%. 

The latest signal suggests the next wave could push DOGE as high as 610% from current levels. This development follows other bullish indicators, including RSI support and a possible monthly bullish engulfing candle.

Meanwhile, an earlier report noted that Dogecoin whales accumulated 310 million tokens, worth over $73 million, in the last two days. The buying spree came during the current market dip and was led by holders of 100 million to 1 billion DOGE. 

Analysts suggest the dip is a retest of a 146-day ascending channel recently broken, rather than a sign of weakness. The continued accumulation by large investors has sparked renewed optimism, as such behavior often precedes a price rebound.