Emily Walker
Dogecoin may be on the brink of a bullish rally as it nears a key resistance point. After a period of price consolidation, a cryptocurrency analyst has indicated that the technical indicators suggest a possible breakout on the upside.
Factors Favoring a Positive Outlook for Dogecoin
Ghazi, a cryptocurrency analyst active on TradingView, anticipates that Dogecoin’s value might rise towards $0.426. Currently hovering around the critical resistance level of $0.408, a breakthrough above this level could ignite a strong upward trend for Dogecoin.
Ghazi has pointed out that the prices are consolidating, possibly ushering in a breakout. The resistance at $0.408 has previously halted Dogecoin’s upward trajectory, as it has frequently tested this level without successfully maintaining a higher price.
The analyst emphasizes that trading volume is crucial in confirming any potential breakout. Increased volume during a breakout would signify strong buyer interest, thus elevating the price. Currently, Dogecoin’s daily trading volume stands at $3.01 billion, reflecting a recent decrease of 3.4%, as reported by CoinMarketCap.
Additionally, Ghazi discusses technical tools such as Dogecoin’s Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI). Both indicators are displaying positive signals for Dogecoin, which supports the prediction of a breakout past the $0.42 mark.
If Dogecoin fails to surpass the resistance levels, even with favorable technical indicators, it may drop to a support level of $0.402. A further dip below this threshold could result in a significant decrease to $0.385.
Signals Indicating Possible Breakout
While a price drop is a possibility, the analyst holds an optimistic view regarding the consolidation, volume, and technical indicators suggesting an imminent breakout. Consequently, Ghazi has outlined several critical breakout signals for investors and traders to monitor.
He asserts that a solid closing above the significant resistance level on higher time frames, like the 4-hour or the daily chart for Dogecoin, would confirm a breakout. Furthermore, a substantial rise in trading volume during this breakout would validate increased buying activity and market involvement.
Moreover, successfully testing the broken resistance level at $0.408 as a support zone would further reinforce the favorable trend for Dogecoin, potentially driving it from $0.40 to $0.42.
To prepare for this anticipated price increase, Ghazi advises traders to establish stop-loss orders and adjust their positions in line with their risk appetite. These measures are vital for managing potential market fluctuations and avoiding financial losses.